UK supermarket giant Sainsbury in merger talks with Asda

LONDON — Britain's supermarket chain Sainsbury on Saturday said it was in talks to merge with rival Asda, in a deal that would create a retail giant with around 30 per cent share of the British market.

"Sainsbury's confirms that it and Walmart Inc. are in advanced discussions regarding a combination of the Sainsbury's and Asda businesses," Sainsbury said in a statement.

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

The combined company would have 2,800 stores.

Sainsbury said a further statement on the proposed merger would be made at 06:00 GMT on Monday.

The Press Association reported the deal would be worth £10 billion (11.4 billion euros, $13.8 billion).

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.