Sainsbury’s and Asda in talks to merge

antijoke

antijoke

antijoke

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So I just saw this news pop up....

British supermarket chains Sainsbury's and Asda are in merger talks - although both brands are expected to be retained.

Talks between the two chains - the second and third largest supermarkets in the UK - are at a reasonably advanced stage, BBC business editor Simon Jack confirmed.
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http://www.bbc.co.uk/news/business-43933517

Will be interesting to see if this is allowed to go through.
 
Roughly, Sainsbury's+Asda = Tesco, so it hardly seems fair to stop it.

I don't quite understand what this means though. Does it means Walmart would own both, or neither, or what? Who would control this new group?
 
billysielu said:
Roughly, Sainsbury's+Asda = Tesco, so it hardly seems fair to stop it.

I don't quite understand what this means though. Does it means Walmart would own both, or neither, or what? Who would control this new group?
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From what I understand it looks like it isn't a straight up merger - Sainsbury's kind of taking over the running of Asda while Walmart retains a stake I think - so that both companies can better leverage their abilities against Amazon and Tesco.
 
I don't think there are details yet but basically could just end up with Walmart getting a stake in Sainsbury's in return for their Asda business as Roff has alluded to above.
 
Interesting. Sainsbury have just been through an organisation wide top-down restructure designed to strip out management layers so they're clearly looking for ways to streamline. I'd be interested to see what any final deal looks like .
 
Makes a lot of sense, what with Sainsbury owning Argos, and pushing quite a few of the smaller less profitable Argos branches inside the large Sainsbury's superstores, it would allow a similar tactic using the ASDA stores, less retail square footage overall, but hitting more customers.
 
Whilst they've said that both businesses will be retained, it does make you wonder for how long.

I always remembered with DSG owning both Currys and PC world stores, and typically you'd find that both stores were on the same retail park. Seeing as Currys stocked a lot of PC stuff that PC world sold, it made no sense financially to have both in separate stores.

Makes you wonder if the same will happen with Sainsburys and Asda, as their stores are not always far apart.
 
Asda is a bit more chavy relative to Sainsburys. Could well see them being rebranded in future and making sure to have plenty of low cost versions of Sainsbury's products in the Asda stores etc... They could easily be told to dispose of/sell on a bunch of stores that are near to others they own.
 
LeeUK said:
If it gets passed I bet there will be some compulsory store sell offs.
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Almost certainly going to be some streamlining - so far with Argos, etc. its been relatively minimal impact wise on customers and staff so possibly same story (though from what some posters have said in threads here it looks like the streamlining within Sainsbury's itself has had a bit bigger impact on staff).

Mike Coupe is doing presentations to external business partners and internal staff on Monday with more details from what I'm hearing - it looks like Sainsbury's has approached Walmart with the aim of taking over running of the business without necessarily a full buy out.
 
Be interesting how head offices will work, seeing as there is a natural North / South divide with both stores, and head office reflect that too
 
Interesting! Consolidation and streamlining tends to make sense from a business POV. Both brands will be retained.

Tesco could lose quite a lot against such a large group, they're hardly flying as it is.
 
Semple said:
Whilst they've said that both businesses will be retained, it does make you wonder for how long.

I always remembered with DSG owning both Currys and PC world stores, and typically you'd find that both stores were on the same retail park. Seeing as Currys stocked a lot of PC stuff that PC world sold, it made no sense financially to have both in separate stores.

Makes you wonder if the same will happen with Sainsburys and Asda, as their stores are not always far apart.
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Can't see it working near me. They're facing each other just outside the town centre, have been for 30 years. Asda never managed to sort the back end IT systems either (used to work for their IT contractor pre-Walmart).

As for Currys/PC World - they managed to co-exist (also with Dixons as a third brand early on) for about 20 years until they saw some sense ... too late.
 
ASDA have been failing to hit all of Walmart's targets for a while now.

Their best plan to compete with the discounters has been major cuts in all areas. This hasnt gone unnoticed by customers who have complained about poorer products , dreary stores and unhappy staff .

Aldi meanwhile , have invested for the future and it seems like it's paying off.

Walmart seem to be doing well elsewhere in the world so could eaaily see them wanting rid . There was rumours earlier in the year and end of last year when they slashed pensions and had another change around at the top.
 
ASDA is a subsidiary of walmart.

Not sure how this will pan out?

Edit I stand corrected.

ASDA is owned by Corinth Services Limited.
 
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This has probably been borne out of the Tesco and Booker merger. Sainsbury's and Morrisons have both sniffed around at Nisa in the wake of the Tesco merger. Interesting times for the food retail multiples and Symbol groups or are those lines been blurred?

Tesco & Booker
Sainsburys & Asda
Co-Op have bought Nisa who in turn are supplying Costcutter.
Bestway bought Conviviality

There will be more consolidation in the market place very soon. Where independant connivence stores sit in this is anyones guess.
 
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