Published: Mon, April 30, 2018
Worldwide | By Victor Meyer

Everyone has same suggestion for Asda and Sainsbury's name after potential merger

Everyone has same suggestion for Asda and Sainsbury's name after potential merger

Liberal Democrat leader Sir Vince Cable, the former business secretary, said the Competition and Markets Authority (CMA) "must investigate" any deal after it emerged the companies were in advanced talks.

A further announcement will be made on Monday 30 April, it said.

Sainsbury's, Britain's No. 2 supermarket, and Asda, the United Kingdom arm of Walmart that is the No. 3 player, are close to securing a merger deal, a source with knowledge of the situation told Reuters on Saturday.

What the merger of the second- and third-biggest supermarkets threatens is the creation of even more concentrated local monopolies, so it is obvious that there must be an investigation by the Competition and Markets Authority, starting immediately.

The latest statistics show that Tesco has a 25 per cent grocery market share, while Sainsbury's has 13.8 per cent and Asda has 12.9 per cent.

The enlarged company would have about 29% of the market - two points ahead of Tesco.

Sky News, which first reported the news, said the deal could be worth over 10 billion pounds.

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Britain's big grocers, including No. 4 player Morrisons, have been losing share to German discounters Aldi and Lidl and must also deal with growing demand for internet grocery shopping and the march of Amazon.

"GMB will be making sure the voices of supermarket workers are not lost amidst all the talk of mergers and acquisitions".

"The middle ground has been squeezed the most by the inevitable march and expandability of the discounters, a reinvigorated Tesco with Booker under its wing is less arrogant and more relevant than with support from suppliers and conversion with shoppers - so the potential of Sainsbury's and Asda joining forces creates a new dimension for the United Kingdom grocery market", she said.

The combined group would retain the Sainsbury's name, though Asda stores would continue to trade under their existing banner, the source said.

National officer Joanne McGuinness said: "We will be seeking urgent meetings with the businesses to get more detail on what a possible merger will involve".

The traditional high street has come under increasing pressure in recent years, with the growth in online retailers. In April 2016, they announced a £1.4 billion takeover of Argos, which led to better than expected results the following Christmas.

In an interview with the BBC, Richard Lim, from economics research consultancy Retail Economics, said the merger would be a "game changer in the United Kingdom grocery market of epic proportions".

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