Sainsbury’s shares surged to the top of the the FTSE 100 at the end of yesterday, with the confirmed merger with Asda pushing the blue chip index into positive territory.
The FTSE 100 closed up 0.09 per cent or 7.09 points at 7,509.3 points, with J Sainsbury shares emerging as the top performer after rising 14.5 per cent or 39.2p to 309p.
It came after J Sainsbury’s and Walmart-owned Asda revealed details about a proposed £12 billion merger and confirmed they have agreed terms on a deal that would create one of the UK’s biggest retail groups, with combined revenues of around £51 billion and a network of 2800 Sainsbury’s, Asda, Habitat, George and Argos stores.
The proposed Sainsbury’s-Asda merger first grabbed headlines over the weekend when it was revealed that both J Sainsbury’s and Walmart were in advanced stages of negotiations.
The deal is now poised to face scrutiny by the Competition and Markets Authority (CMA), which said the deal was “likely to be subject to review” and that it would assess whether the deal could reduce competition and choice for shoppers.
While bosses at the grocery giants initially insisted no stores would close as a result of the merger, they later conceded that possible outcomes from a CMA probe could force them to sell stores as part of modelling ahead of the merger.
An exact number of store closures was not revealed by the chains, but research firm GlobalData estimated that “at least” 75 stores where Sainsbury’s and Asda overlap were at risk.
Sainsbury’s has insisted that that any stores sold would be done so as “trading entities”, but the future of staff at those outlets – which number anywhere from 7500 to 10,000 – will depend on whether a buyer is found and if the the shops are then kept trading.
Just hours after the grocers conceded some stores could be shut as a result of the CMA probe, Sainsbury’s chief executive Mike Coupe was caught on camera singing “we’re in the money, the sky is sunny, let’s lend it, spent it, send it rolling along” in between interviews on ITV News.
He said in a statement afterwards that it was “an unguarded moment” as he tried to compose himself before a TV interview.
“It was an unfortunate choice of song, from the musical 42nd Street which I saw last year and I apologise if I have offended anyone,” Coupe added.