Walmart on edge of United Kingdom market: Sainsbury and Asda in merger talks

ExpressJ Sainsbury and Asda owners Wal Mart are in the final stages of an announcement to join forces

The news portal suggested that competition approval would be hard, given Sainsbury's and Asda's status as the second and third largest grocers in the United Kingdom respectively.

Following the story, Sainsbury's released a statement confirming the groups were in advanced talks.

Liberal Democrat leader Vince Cable said: The grocery market - and the British shopper - already suffers from the mid-market being dominated by just a handful of big players.

Bernstein Research said in a research note the Tesco-Booker deal made Sainsbury and Asda fall further behind on scale.

It is understood that any investigation by the CMA would only be announced once an intention to merge was formally unveiled. It will automatically trigger a competition probe, which history suggests could force store sell-offs in a tough retail climate where there are likely to be fewer buyers than during more buoyant economic times when there was a space race among the big supermarket chains.

One option is Sainsbury's absorbing Asda stores, while Walmart take a large stake in the combined group.

One source close to Wal-Mart said the merger would allow the two companies to invest in providing more products at lower prices.

Ford dropping all but 2 cars to focus on trucks, SUVs
The automaker says it made $1.74 billion, or 43 cents per share, compared with $1.59 billion, or 40 cents per share a year ago. That is on top of about $14 billion in efficiencies the company had already promised to achieve in the next several years.

In recent years Walmart has shifted its traditional approach from building overseas businesses itself to partnering with local players, for example in China.

Asda and Sainsbury's have also faced a big challenge from the emergence of the German discounters Aldi and Lidl, ‎which have begun to build a big presence in the UK.

The source described the planned deal - which would consolidate a brutally competitive United Kingdom food market while helping Walmart address its underperforming United Kingdom arm through greater buying power - as a "merger".

If concluded, a deal‎ would be the most significant in the UK's food retailing sector since Wm Morrison bought Safeway to give it a UK-wide presence in 2004.

Sainsbury's and Asda are this weekend finalising a £12bn merger, marking the biggest shake-up of the grocery industry in more than a decade. Asda did not respond to requests for comment.

Sainsbury's has reported three straight years of profit decline, and is forecast to report a fourth on Wednesday.

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.

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