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-March 27, 2007

 
 

Wal-Mart Evaluating Options in Possible Bid for the UK's J Sainsbury Chain

 
 
Wal-Mart's Asda subsidiary, which has struggled against TESCO, may be interested in buying the UK's third largest grocer
 
 

SCDigest Editorial Staff

 
 

Word out of the United Kingdom this week that Wal-Mart, the world's largest retailer, is seeking advice as to whether it might get the OK from government regulators if it were to make a bid from the J. Sainsbury grocery chain, the third largest in the country.

Wal-Mart owns the Asda chain in the U.K, which is the second largest chain after TESCO, and has struggled in competing with TESCO there, losing some market share to TESCO by most estimates.

Sainsbury is thought to be "in play," as a group of prviate equity concerns announced in February it was considering making a bid for the company. Asda was looking to contact relevant regulatory authorities to explore the feasibility of it bidding for Sainsbury, according to the Reuters news service. A purchase of the entire chain, or pieces of it from a private equity group, would have to get the approval of the country's Competition Authority.

Other bidders for Sainsbury may also emerge.

After struggling against Tesco, some believe Wal-Mart may look to gain greater critical mass and economies through merging with Sainsbury. Sainsbury would also give Wal-Mart/Asda something it lacks in the UK, which is a network of convenience stores. TESCO strength across a variety of store formats is viewed by many as key to its success.

 
     
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