Morrisons looks set to be the ‘kingmaker’ in the £14bn merger of J Sainsbury and Asda as they are forced to offload stores to get the deal done.
The Mail understands that Morrisons, the fourth-largest supermarket in the UK, is eyeing shops that Sainsbury’s and Asda could be forced to sell as part of a probe into the tie-up. And they could come at a knockdown price.
Sainsbury’s chief executive Mike Coupe has already admitted that of Sainsbury’s 644 supermarkets in the UK, 138 are within a mile of an Asda store, raising potential competition issues once they are owned by the same company. In ten locations the two firms are less than 200 yards apart.
Coupe has played down the threat to these stores, saying rivals are nearby, meaning competition remains fierce. But it is thought a number could be sold.
David McCarthy, HSBC’s head of consumer retail research, said: ‘We believe Morrisons could be well positioned to benefit from the proposed merger, picking up stores at a good price.’
Morrisons has a 10.4 per cent share of the grocery market, compared with Tesco, the leader, which claims a 27.4 per cent slice.
If the Competition and Markets Authority lets Sainsbury’s and Asda join forces, they will have more than 30 per cent of the market.
Some reports estimate that between 250 and 300 stores may need to be sold.
Clive Black, head of research at Shore Capital, said a mass sale of Sainsbury’s and Asda stores would give Morrisons the opportunity to expand into London and the South East.
‘We stand by the view that Morrisons is likely to be the kingmaker of this deal,’ he said. ‘[It] is probably best positioned to be offered the opportunity to acquire stores if it wants them.’
Analysts expect Morrisons to post a solid set of results today. Morrisons and Sainsbury’s declined to comment.