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Home / Business / Sainsbury CEO seeks Walmart Deal to confront Amazon and Aldi

Sainsbury CEO seeks Walmart Deal to confront Amazon and Aldi



J Sainsbury Plc CEO Mike Coupe Resists Amazon.com Inc. and Avenges Grocers with Another Big Business – A Billions Transaction With Walmart Inc. That Would Substantially Change the British Supermarket

The company plans to announce details of a combination with Walmart's Asda chain on Monday after a Bloomberg News report was confirmed on Saturday that the companies are in talks. Walmart would be the largest shareholder in the combined company, accounting for more than 40 percent, according to those familiar with the situation. Representatives of Walmart and Sainsbury did not want to comment.

For Coupe, who assumed the position of CEO four years ago, the move would be the boldest and riskiest step to change the British retail industry through slumps in German discounters [1

9659006] Lidl and Aldi and the rise of e-commerce , The deal would build on Sainsbury's acquisition of Argos in 2016, which has begun to bolster the grocer's profits as harsh price competition and the Brexit-induced weakness in the pound squeeze margins in the grocery sector.

See also: Sainsbury Can Buy Asda. That does not mean it should: Gadfly

The combination of Sainsbury with a market value of 5.9 billion pounds ($ 8.1 billion) with Asda would create a giant with a market share of about 19659010 Tesco Plc on the market could compete or even surpass 2,800 stores, nearly 350,000 employees and a turnover of 50 billion pounds. Currently, Sainsbury ranks second among the UK supermarket chains, followed by Asda.

Benefits for Libra

"There are certainly some economies of scale in purchasing," said Bryan Roberts, an analyst at TCC Global. Still, a combined company will not "get rid of the problems that both companies face," Roberts said. "You still will not be cheaper than Lidl or Aldi."

Coupe, who has previously worked for Asda and other UK retailers, has added the online threat to the London-based company that led to the demise of the BHS department store, electronics retailer Maplin and the British arm of Toys "R" Us brought to change the company.

Supermarket Operator Thousands of jobs have also been cut as a result of a price escalation caused by the Brexit-induced weakness of the pound, and the reported profits of Tesco and Marks & Spencer Group Plc have more than halved over the last three years Switching consumers to online shopping, which is preceded by many other countries: About 18 percent of retail sales take place online in the UK, compared with about 12 percent in the US

While Coupe has defied the expectations of some analysts by Su With the integration From Argos and saving on cost savings, the Asda weaving together with Sainsbury could be more challenging. The Walmart division is favored by shoppers on tight budgets, while Sainsbury appeals to a more affluent crowd. Sainsbury has aggressively expanded to convenience stores and focuses on the south of England around London, while Asda has more large supermarkets in the north of the country. This geographic distribution limits the overlap of stores.

Qatar Support

Synergies could be minimal in areas such as marketing, when Sainsbury and Asda maintain separate brand identities, Roberts said, adding that he does not anticipate large-scale competition. However, in some areas where the two grocers overlap, disposals of individual stores may be required.

Sainsbury's currently largest shareholder, the Qatar Investment Authority, advocates a potential merger, according to a person who is familiar with the business. The $ 320 billion state-owned gas-rich state fund, which holds 22 percent, is aware of the discussions and plans to publicly declare its support on Monday, the person said.

Some British politicians have a more critical view with John McDonnell, Treasury spokesman for the opposition Labor Party, told Sky News that the deal "in detail" should be scrutinized by antitrust authorities to ensure consumers are not hurt become.

Sainsbury may have been encouraged by the regulatory response to Tesco's recent purchase of the wholesaler Booker Group Plc, which the UK authorities released after graduation, posed no major threat to competition.

Walmart Abroad

For Walmart, who bought Asda for £ 6.7 billion in 1999 The contract marks another cutback in its international presence as the company focuses on competing with Amazon at home. Walmart acquired Asda at a time when the US company was aggressively expanding overseas. Since then it has withdrawn from international markets from Germany to South Korea.


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