Walmart’s Asda and Sainsbury merger is off

by Kim Souza (ksouza@talkbusiness.net) 464 views 

Walmart’s plan to merge its Asda operations in the United Kingdom with Sainsbury hit a road block and the partners agreed to terminate the merger on Thursday (April 25).

News broke around 1:15 a.m. CST on Thursday with Walmart corporate communications releasing a statement on the matter. Walmart said the UK Competition and Market’s Authority (CMA) issued its final report on the proposed merger, resulting in prohibition of the merger.

“Despite the clear customer benefits of the proposed merger, as a result of the CMA’s findings, Asda, its parent Walmart and Sainsbury’s have mutually agreed to terminate the transaction,” Walmart noted in the release.

“We have been clear from the beginning of the proposed merger about two things. Firstly, that retail is rapidly changing and standing still is not an option, and secondly that we will always ensure our international markets are strong local businesses powered by Walmart,” said Judith McKenna, CEO of Walmart International.

“The UK remains one of the most competitive retail markets in the world and Asda’s seven consecutive quarters of year-on-year growth show it is a strong business with a clear strategy and focused leadership. It was against that backdrop that we decided to explore the proposed merger with Sainsbury’s – an opportunity which would have further strengthened the Asda business and delivered real benefits for UK customers,” McKenna said.

“While we’re disappointed by the CMA’s final report and conclusions, our focus now is continuing to position Asda as a strong UK retailer delivering for customers. Walmart will ensure Asda has the resources it needs to achieve that,” McKenna added.

She said Walmart remains committed to Asda. Roger Burnley, CEO of Asda, said the company was right to explore the merger and while he is disappointed by the ruling, Asda will continue to find a way to deliver on low prices in a demanding market.

“Our focus is now on the most important job we all have – delivering for our customers,” Burnley said.

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