Sainsbury’s & Asda: will it go ahead?

The supermarkets are playing a positive tune, but there is a long way to go.

If you haven’t heard already, J Sainsbury has announced that it has ‘agreed terms’ for a £15bn deal to ‘combine’ with the Asda Group. Walmart (which currently owns Asda) will retain a 42% holding in the combination.

Although the two brands will remain seperate, Sainsbury’s hopes the move will strengthen the group’s position in a dynamic market by allowing it combine Asda’s low-cost groceries and the George clothing brand with Sainsbury’s traditionally higher end products and catalogue retailer Argos (which the chain purchased in 2016).

The man who is set to lead the new merged behemoth, Sainsbury’s CEO Mike Coupe, has said that there will be no store closures and has all but promised consumers that there will be an overall reduction in prices – some by up to 10%.

However, given that the deal is not expected to be completed until autumn 2019, is it all a bit too soon for such confidence?

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