Sainsbury's held preliminary discussions with private equity-owned rival Morrisons over a potential multibillion-pound deal between November 2025 and February this year before deciding to walk away, according to sources familiar with the matter. While no active talks are currently underway, there are no rules against negotiations restarting in the future. A combination of Britain's second- and fifth-largest supermarkets would create a grocery business with a 23.6 per cent market share, narrowing the gap to market leader Tesco with 27.8 per cent, according to Worldpanel by Numerator.
However, any deal would likely require Sainsbury's to sell stores for Competition and Markets Authority approval, which would be closely scrutinised given the political sensitivity around rising grocery prices. Since the 2019 blocked Sainsbury's-Asda merger, competition has intensified with Aldi and Lidl opening stores, now accounting for 19.3 per cent of grocery sales combined. Morrisons has lost ground since its 2021 £10bn acquisition by Clayton Dubilier & Rice, loading its balance sheet with £7.5bn debt.
For Sainsbury's, chief executive Simon Roberts is focusing the business on food, having exited banking and agreed to sell Argos.
Source: Financial Times Companies · Summarized by HeadlinesBriefing