Sainsbury's Seeks Merger With Asda In Huge UK Deal

British supermarket chain Sainsbury's has confirmed it is in advanced talks to merge with rival Asda, in a deal that would create a retail giant with around 30 percent share of the market.

Britain's biggest retail chain is currently Tesco with a market share of 27.6 percent, followed by Sainsbury's and Asda with 15.8 percent and 15.6 percent, according to data from Kantar Worldpanel.

The Press Association reported the deal would be worth £10 billion (HK$108 billion). The deal would still have to be approved by Britain's Competition and Markets Authority.

Richard Lim, from economics research consultancy Retail Economics, told the BBC that the merger would be a "game changer in the UK grocery market of epic proportions". "The potential tie-up would see the combined business take Tesco head-on," he said.

Joanne McGuinness, national officer with the Usdaw shopworkers union, said: "We will be seeking urgent meetings with the businesses to get more detail on what a possible merger will involve. "Our priorities will be to protect our members and ensure any deal between the retailers does not impact on their jobs or incomes."

British retail sales have been badly hit in recent months by a combination of weaker consumer spending, slower economic growth and snowy weather. Sainsbury and Asda have also been put under pressure by the growth in online retailers and low-cost rivals such as Aldi and Lidl. (AFP)