Competition watchdog urged to investigate possible Asda-Sainsbury's merger

Sainsbury's Open New Energy Efficient Store In King's Lynn

Sir Vince Cable, leader of the Liberal Democrats and the former business secretary, said the CMA "must investigate" any deal after it emerged the companies were in advanced talks.

J Sainsbury PLC, the chain's corporate name, released no other information about the potential deal and said it would make another announcement before the stock market opens today.

Britain's second-biggest supermarket chain, J Sainsbury, confirmed on Saturday that it is going to come in advanced talks with Walmart Inc.to purchase its United Kingdom operations.

It is understood that any investigation by the CMA would only be announced once an intention to merge was formally unveiled.

Shadow business secretary Rebecca Long-Bailey echoed Sir Vince's calls, warning the merger risks "squeezing what little competition there is in the groceries market even further".

Sainsbury's and the similarly-sized Asda would overtake Tesco with a combined market share of 31.4 percent versus Tesco's 27.6 percent, according to the latest data from market researcher Kantar Worldpanel.

One source close to Wal-Mart said the merger would allow the two companies to invest in providing more products at lower prices.

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Sainsbury's has a 13.8 per cent grocery market share, Asda has 12.9 per cent. "GMB will be making sure the voices of supermarket workers are not lost amid all the talk of mergers and acquisitions". Sainsbury's confirms that it and Walmart Inc are in advanced discussions regarding a combination of the Sainsbury's and Asda businesses.

National officer Joanne McGuinness said: "We will be seeking urgent meetings with the businesses to get more detail on what a possible merger will involve".

Yet the deal makes a lot of sense - especially if we assume it is Walmart, the U.S. giant that owns Asda, effectively waving a white flag on the United Kingdom market, and deciding it would prefer to throw in its lot with another operator.

The traditional high street has come under increasing pressure in recent years, with the growth in online retailers.

In 2016 Sainsbury's paid £1.4 billion to take over Argos and Habitat owner Home Retail Group and has been expanding its ranges and presence since.

In an interview with the BBC, Richard Lim, from economics research consultancy Retail Economics, said the merger would be a "game changer in the United Kingdom grocery market of epic proportions".

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