PRESS: J Sainsbury held merger talks with rival Morrisons - Sky News

(Alliance News) - J Sainsbury PLC held discussions on a potential merger with grocery peer Morrisons earlier this year, Sky News reported on Monday.

Sky said the "exploratory discussions" took place "some months ago," and that they are not believed to currently be active.

However, "industry sources" believe that within the next three years, "another wave of supermarket industry consolidation is inevitable," Sky noted.

The outlet also cited "retail insiders" as saying that private equity firm Clayton Dubilier & Rice, which owns Morrisons, would be open to a similar deal "with one of the chain's major competitors."

And analysts claimed that Asda, which came close to a merger with Sainsbury's in 2020, would also be likely to be active "in a fresh round of corporate dealmaking".

The 2020 deal was stymied by competition regulators, and so far remains the last attempt at a merger by two 'big four' UK food retailers, Sky noted.

"However, retailers believe the industry landscape has shifted so far since then - with Aldi and Lidl growing into formidable discount competitors - that a deal between two of Asda, Morrisons and Sainsbury's would be far likelier to gain approval," Sky added.

It said that Sainsbury's, Morrisons and Clayton Dubilier & Rice declined to comment on the matter.

Shares in J Sainsbury were 0.4% lower at 322.10 pence on Monday afternoon in London.

By Emma Curzon, Alliance News reporter

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