Walmart’s ASDA to Merge With UK’s Sainsbury’s

In the world of mega-mergers, the big news coming out of Wall St is that Wal-Mart’s Asda and Sainsbury’s were going to be merged by a deal worth £7.3 billion (almost $10 billion).

The two strongholds in the supermarket industry are combining to form a giant marketing lane. Being the second and third largest supermarket networks, they are going to beat off Tesco (currently at number 1) as they will then have a hold of 30 percent of the grocery sales in the United Kingdom.

“The market has changed beyond recognition in the last 10 years and even in the last three years, the discounters have doubled their share, we’ve got new entrance coming into the market that just couldn’t exist a few years ago” O’Byrne told CNBC Monday morning. This new entrance in the market is sure to revolutionize the supermarket industry in the UK if it gets approval from authorities.

ASDA Megastore in Birmingham, UK

The administration claims that this merger is going to bring about £500 million worth of cost savings which might eventually lead to a reduction in prices of consumer goods up to 10 percent. So, in a broader meaning, this is going to help not only the business owners but also the customers as they will have to pay less for the same things, which will pose a threat to other businesses.

Currently, the Members of British Parliament are debating the pros and cons of this merger and a regulator has been appointed to look into the matter more closely. It is feared that this merger will push small businesses out of the picture and people out of their jobs as it is going to give a very tough competition to other supermarkets.

The producers and wholesalers are going to be more inclined to do business with this merged supermarket chain, which will put other businesses at a big disadvantage.

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