It was announced on Friday that Sainsbury’s has made a formal bid for Home Retail Group, the owner of Argos. The bid was announced shortly after Sainsbury’s rival, Steinhoff International, a South African company, withdrew from the bidding process. The bid for Home Retail Group needed to be formally submitted by 17:00 GMT on Friday to comply with UK takeover rules. Despite no formal acceptance of the offer, Home Retail Group’s board noted the announcement and said that it looked forward to working with them towards a recommendation of the offer.
Sainsbury’s chairman David Tyler spoke of the intense period of change that the UK grocery market is currently experiencing. The rise of the discount retailers Lidl and Aldi have reduced Sainsbury’s market share and with the emergence of Amazon later this year in the online grocery retail market further threatens Sainsbury’s current market share. The combination of Sainsbury’s and Home Retail Group will create a multi-product, multi-channel retailer with fast delivery networks. As well as the potential for improvements in Sainsbury’s distribution networks it will also move Argos stores into a number of its current supermarkets.