LONDON (Reuters) - Sainsbury’s (SBRY.L) and Walmart’s Asda (WMT.N) are in talks to create Britain’s biggest supermarket group, overtaking Tesco (TSCO.L) by market share in a combination of their UK businesses worth up to 15 billion pounds ($20.7 billion).
Sainsbury’s confirmed on Saturday that it and Walmart, the world’s largest retailer, were in advanced discussions regarding a combination of the Sainsbury’s and Asda businesses and would make a further announcement at 0600 GMT on Monday.
It gave no details of the structure of any deal but a source with knowledge of the situation told Reuters the holding company of the combined group would retain the Sainsbury’s name and Sainsbury’s Chief Executive Mike Coupe would lead it.
The source described the planned deal - which would further consolidate Britain’s fiercely contested grocery market and help Walmart address its underperforming UK business - as a “merger”.
Three sources with knowledge of the situation said Walmart would take a minority stake in the combined business. Two said Walmart would be the biggest shareholder, with a stake of around 40 percent.
The Qatar Investment Authority, which in the past has tried to buy Sainsbury’s, is currently the supermarket group’s biggest shareholder with a 22 percent stake. A deal with Walmart would likely dilute that holding.
Sainsbury’s invited media and analysts to presentations scheduled for Monday.
Walmart declined to comment. Asda did not immediately respond to requests for comment.
Sky News, which first reported the