Sainsbury’s shares rocket after it reveals 10 per cent cut in many items

 

Sainsbury and Asda say their planned £13bn merger, and combined revenues of £51bn, will cut shopper’s costs. The deal likely to face close scrutiny by competition authorities.

Sainbury’s chief executive Mike Coupe said he could not dismiss the possibility that regulators could order the disposal of some sites.

Asda’s owner Walmart would receive £3bn in cash plus a 42 per cent stake in the combine business, in a deal which values the Leeds-based supermarket chain at £7.3bn. Shares in Sainsbury’s shot up by as much as 20 per cent in early trading and closed at 14.5 per cent higher.

The group which also owns Argos said the merger would create a network of more than 2, 800 Sainsbury’s, Asda and Argos locations with 330, 000 employees.

Asda’s operating profit for 2017, had falledn by 15 per cent to £720m and Sainsbury reported a 19 per cent fall in its annual profit for the 52 weeks to 10 March to £409m.

Sainsbury’s chief executive Mike Coupe will lead the newly-enlarged business with Asda continuing to be run from Leeds with its own chief executive who will join the board.