Sainsbury’s shares soared 20 per cent today morning
Shares in Sainsbury’s jumped to their highest level since 2014 in early trading after it confirmed its plans to merge with the the UK arm of Walmart, Asda.
We’re creating a dynamic new player in UK retail – three well-known, trusted brands in Sainsbury’s, Asda & Argos. We plan to operate a dual-brand strategy in grocery, with the scale to invest in the areas that matter most to customers: price, quality & more flexible ways to shop pic.twitter.com/YwPeJ67vxu
— Sainsbury’s News (@SainsburysNews) April 30, 2018
The deal will result in Walmart holding 42 per cent of the equity of the combined business and receiving £2.975bn, valuing Asda at about £7.3bn.
Sainsbury’s chairman David Tyler stated that the deal is good for the UK: “As one of the largest employers in the country, the combined business will become an even greater contributor to the British economy. The proposal will bring together two of the most experienced and talented management teams in retail at a time when the industry is undergoing rapid change.
We welcome Walmart as a significant shareholder and look forward to working closely with them.”
Sainsbury’s chief executive Mike Coupe added: “This is a transformational opportunity to create a new force in UK retail, which will be more competitive and give customers more of what they want now and in the future.
“It will create a business that is more dynamic, more adaptable, more resilient and an even bigger contributor to the UK economy.”
While Sainsbury’s shares soared 20 per cent today morning, other retailers are facing a hit with Morrisons down 3 per cent and Tesco down 2.5 per cent.