Walmart and Sainsbury’s announce combination of Sainsbury’s and Asda, Walmart’s wholly owned UK business.

Walmart Inc., Bentonville, Ark., and J Sainsbury plc, UK, announced the combination of Sainsbury’s and Asda Group Ltd., Walmart’s wholly owned UK retail subsidiary, to create what is dubbed to be one of the UK’s leading grocery, general merchandise and clothing retail groups.

Walmart would hold 42% of the share capital of the combined business, and 29.9% of Sainsbury’s ordinary shares.as part of the combination, along with any ongoing defined benefit pension related obligations.

"We believe the combination offers a unique and exciting opportunity that benefits customers and colleagues,” says Doug McMillon, Walmart’s president and CEO. “As a company, we’ve benefited from doing business in the UK for many years, and we look forward to working closely with Sainsbury’s to deliver the benefits of the combination."

As part of the transaction, Walmart will share its global retail network and knowledge. The combined business will offer enhanced capabilities and a strengthened balance sheet to help deliver value and opportunities for customers, colleagues, suppliers and shareholders of both businesses.

The new business will operate a distinctive dual brand strategy. Asda would continue to be run from its own chief executive officer, Roger Burnley. Key benefits of the combination include:

• Create what is said to be one of the UK’s leading grocery, general merchandise and clothing retail groups.
• Enable investment in price, quality and range and create more flexible ways to shop across Sainsbury’s, Asda and Argos.
• Maintain both the Sainsbury’s and Asda brands.
• Offer more opportunities for over 330,000 colleagues at all levels within the enlarged and more resilient group.
• Combine a complementary network of more than 2,800 Sainsbury’s, Asda and Argos stores and retail websites.
• Provide a comprehensive range of channels and formats across supercenters, superstores, supermarkets, convenience stores and digital formats.