Two major supermarkets Sainsburys and Asda have confirmed they are merging to create the UK’s biggest food group in a sensational £15bn deal.

A merger between Asda and Sainsbury’s will create the UK’s biggest supermarket chain with around 31 per cent of the grocery market, surpassing Tesco’s 27 per cent.

The new supermarket group will have combined revenues of £51billion and will aim to generate £500million in cost savings.

The Competition and Markets Authority (CMA) will soon start its investigation of the proposed merger, raising the prospect that Sainsbury’s and Asda will be forced to sell off stores if they directly compete in local areas.

However, Sainsbury’s insisted that it does not expect to shut any stores. The supermarket says its store footprint is more focused on the south, and Asda has more stores in the north.

The chains will continue to trade under their separate brands and stores will keep the same names.

Bosses could aim to make savings by sharing some back-room operations such as purchasing and distribution.

Asda chief executive Roger Burnley said: “Asda will continue to be Asda, but by coming together with Sainsbury’s, supported by Walmart, we can further accelerate our existing strategy and make our offer even more compelling and competitive.”

Sainsbury’s chairman David Tyler said: “We believe that the combination of Sainsbury’s and Asda will create substantial value for our shareholders and will be excellent news for our customers and our colleagues.

“As one of the largest employers in the country, the combined business will become an even greater contributor to the British economy.”

Asda and Sainsbury’s both promised its customers that it would see savings in their weekly shop.


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