Published: Wed, May 02, 2018
Business | By Pearl Harrison

Bord Bia conducts 'action plan' in response to Sainsbury's/Asda merger

Bord Bia conducts 'action plan' in response to Sainsbury's/Asda merger

Sainsbury's and Asda which is owned by U.S. retailer Walmart - confirmed on Monday they are to merge in a £13-billion deal which will create Britain's biggest supermarket group surpassing fierce rival Tesco.

"Morrisons is attracting more shoppers".

The merger, between the UK's number two and three supermarkets, was agreed upon by the two companies but awaits approval from the Competition and Markets Authority (CMA) in order to be finalised. Sainsbury's equity was valued at 6 billion pounds at Friday's close.

The proposed deal is likely to attract significant scrutiny, with competition authorities having a final veto on whether it can go ahead.

"This is a pivotal moment for the British grocery market", McKevitt said. "We see no chance of it getting through the CMA without a major dismemberment of the combined business", said Peel Hunt analyst Charles Hall.

When Sainsbury's announced their store development programme for Northern Ireland in June 1995, David Sainsbury (now Lord Sainsbury of Turville) promised NI consumers that they would see price savings of between 10-12% in their weekly (at that time) shopping baskets.

Asda President and CEO Roger Burnley said; "The combination of Asda and Sainsbury's into a single retailing group will be great news for Asda customers, allowing us to deliver even lower prices in store and even greater choice".

Prices are expected to be decreased by 10% on numerous products customers buy regularly.

"Meanwhile, Sainsbury's premium own-label line "Taste the Difference" clocked up sales of £832 million annually - almost two and a half times the size of Asda's "Extra Special" range". It'll own 42 percent of the combined company, with 29.9 percent of the voting rights.

The Qatar Investment Authority, now the largest shareholder in Sainsbury's with a 22 per cent stake, said it supported the deal. Both store groups have found that it has been extremely hard to do so, although Asda has been successful in gaining planning permission for a number of new stores.

Sainsbury's also reported its full-year results on Monday, showing a first rise in profit in four years.

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