Walmart in Talks to Merge Asda With U.K. Grocer Sainsbury
April 28 2018 - 10:40AM
Dow Jones News
By Ben Dummett
LONDON -- Walmart Inc. is in advanced talks to merge its U.K.
grocery chain Asda Group Ltd. with rival J Sainsbury PLC, as
Britain's supermarket sector faces pressure to gain scale in a bid
to fend off aggressive discounters.
In a brief statement Saturday, Sainsbury, which has a market
value of $8.16 billion, confirmed the tie-up talks and said that it
would make a further announcement Monday.
The deal comes after rival grocer Tesco PLC agreed last year to
acquire Booker Group PLC, the country's largest food wholesaler,
for GBP3.7 billion ($5.1 billion), catapulting it from the U.K.'s
biggest supermarket chain to its largest food business and allowing
it generate new avenues of revenue.
Like that deal, any merger between Asda and Sainsbury will
likely draw antitrust scrutiny amid worries that consolidation
could give the combined entity greater power to maintain or raise
prices for food.
Walmart agreed to acquire Asda in 1999 for about $10.8 billion,
as part of the U.S. retail giant's goal at the time to double its
international operations. But Asda has struggled to increase sales
over several recent quarters as it loses market share to budget
retailers such as Aldi and Lidl.
Write to Ben Dummett at ben.dummett@wsj.com
(END) Dow Jones Newswires
April 28, 2018 10:25 ET (14:25 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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