STREAMING NOW: Watch Now

Walmart sells its UK supermarket business in $10 billion deal

Walmart is retreating from Europe, merging its UK supermarket business Asda with bigger rival Sainsbury's.In r...

Posted: Apr 30, 2018 1:37 PM
Updated: Apr 30, 2018 1:37 PM

Walmart is retreating from Europe, merging its UK supermarket business Asda with bigger rival Sainsbury's.

In return, Walmart will receive -2.97 billion ($4.1 billion) in cash and a 42% stake in the combined business, the companies said in a statement on Monday.

The deal values Asda at -7.3 billion ($10 billion), and creates a mega retailer with 2,800 stores and combined annual sales of roughly -51 billion ($70 billion).

The sale of Asda follows Walmart's exit from Germany, its other major outpost in Europe, in 2006.

Walmart could use the cash to fuel its expansion in other international markets. The US retailer is reportedly close to agreeing to invest in India's Flipkart, an online retailer that has also attracted attention from Amazon.

"This proposed merger represents a unique and bold opportunity, consistent with our strategy of looking for new ways to drive international growth," Judith McKenna, the CEO of Walmart International, said in a statement.

Related: Amazon and Jeff Bezos are on top of the world

The combination with Asda will give Sainsbury's more firepower as it confronts digital competitors including Amazon and aggressive discount chains, such as Germany's Lidl and Aldi.

It also creates a new UK market leader: Sainsbury's and Asda together control over 31% of the grocery market, according to Kantar Worldpanel. The current industry front runner, Tesco, has nearly 28%.

Shares in Sainsbury's soared by as much as 21% in early London trading.

Regulators will have a close look at the deal, but the geographical distribution of Sainsbury's and Asda stores could limit concerns over reduced competition.

10% price cut on popular items

Upmarket Sainsbury's is strong in southern England, while Asda, which tends to have larger stores and lower prices, is well represented in the north. Together, the supermarket chains employ 330,000 people.

The UK Competition and Markets Authority last year approved Tesco's takeover of wholesaler Booker, saying the deal would not reduce competition in the sector, which is known for its razor-thin margins and frequent price wars.

Sainsbury's said it would retain both brands, and does not plan to close any stores. It expects to generate annual savings of at least -500 million ($688 million) through the merger and said it would use its larger scale to cut prices on many popular products by 10%.

The combined business will be led by Sainsbury's chairman and chief executive. The CEO of Asda and two representatives from Walmart will join the company's board. The deal is expected to be completed in the second half of 2019.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 259117

Reported Deaths: 5668
CountyCasesDeaths
DeSoto17436187
Hinds16524328
Harrison13876199
Rankin11000217
Jackson10652187
Lee8981141
Madison8413168
Jones6552112
Forrest6101121
Lauderdale6034189
Lowndes5463119
Lafayette507393
Lamar496465
Washington4877124
Bolivar4068109
Oktibbeha401681
Panola378380
Pontotoc372155
Monroe3628105
Warren3619101
Union350563
Marshall349569
Neshoba3433152
Pearl River3380104
Leflore3079108
Lincoln300687
Sunflower289272
Hancock285360
Tate276762
Alcorn268854
Pike266580
Itawamba266261
Scott253448
Yazoo250156
Prentiss249552
Tippah245850
Copiah244549
Coahoma243654
Simpson240069
Leake234367
Grenada221171
Marion218473
Covington216972
Adams210170
Wayne206432
Winston205267
George202739
Attala195761
Newton195745
Tishomingo192461
Chickasaw186144
Jasper176038
Holmes169868
Clay162735
Tallahatchie154935
Stone148424
Clarke143562
Calhoun138021
Smith125825
Yalobusha120234
Walthall113437
Greene112129
Noxubee111425
Montgomery110936
Carroll105922
Lawrence104317
Perry103231
Amite99926
Webster94324
Tunica87621
Jefferson Davis87327
Claiborne86825
Benton84023
Humphreys83624
Kemper79120
Quitman7029
Franklin68716
Choctaw62313
Wilkinson58825
Jefferson55920
Sharkey44217
Issaquena1606
Unassigned00

Alabama Coronavirus Cases

Cases: 432536

Reported Deaths: 6379
CountyCasesDeaths
Jefferson63523957
Mobile30967562
Madison27627201
Tuscaloosa21122268
Montgomery19495326
Shelby18941126
Baldwin16798188
Lee12901102
Morgan12447129
Etowah11911178
Calhoun11365205
Marshall10322119
Houston8813156
Limestone823176
Cullman8159106
Elmore8056104
DeKalb7796102
Lauderdale773399
St. Clair7705122
Talladega6347109
Walker5993174
Jackson590341
Colbert543274
Blount541186
Autauga527061
Coffee454160
Dale405482
Franklin371948
Russell345712
Chilton340972
Covington334168
Escambia328344
Dallas310196
Chambers297370
Clarke290536
Tallapoosa2665107
Pike258830
Marion250155
Lawrence249150
Winston231442
Bibb219848
Geneva206946
Marengo205229
Pickens198631
Hale180842
Barbour177836
Fayette174528
Butler171358
Cherokee162530
Henry157523
Monroe150718
Randolph143236
Washington139527
Clay128546
Crenshaw121644
Cleburne119724
Lamar119621
Macon119637
Lowndes112536
Wilcox105822
Bullock101428
Perry99118
Conecuh96320
Sumter89726
Greene76723
Coosa62215
Choctaw51624
Out of AL00
Unassigned00
Tupelo
Clear
57° wxIcon
Hi: 57° Lo: 45°
Feels Like: 57°
Columbus
Mostly Cloudy
55° wxIcon
Hi: 55° Lo: 48°
Feels Like: 55°
Oxford
Clear
54° wxIcon
Hi: 55° Lo: 42°
Feels Like: 54°
Starkville
Partly Cloudy
54° wxIcon
Hi: 54° Lo: 47°
Feels Like: 54°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather