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. |