KKR plots Asda bid as Sainsbury's deal stumbles

US private equity firm KKR is prepping a bid for Asda as the grocery giant’s £14 billion merger with Sainsbury’s looks increasingly unlikely to happen.

KKR, which owns Trainline and has invested in Alliance Boots, is thought to be working with Tony De Nunzio, the former Asda boss who now advises the firm. He would become Chairman if KKR pulled off the deal, which would mark the first time that one of the big four UK supermarkets fell into private equity ownership. Walmart would retain a significant minority holding.

Earlier this week, GMB, the trade union that represents Asda workers, came out in opposition to the proposed Asda/Sainsbury’s merger as the Competition and Markets Authority (CMA) released its damning provisional findings.

“The findings are staggering. We will absolutely oppose any merger that would see hundreds of stores and scores of depots put at risk,” said Tim Roache, GMB General Secretary. "People are waking up today worried about what this means for them. If this merger were allowed to go ahead, we could see thousands of jobs at risk in everything from stores and distribution, to head office and home shopping.”

“Our members - many of whom have worked at Asda for years, if not decades - will continue to support Asda in being the highly successful, standalone business it has been for generations, but it’s increasingly clear from the CMA announcement that isn't compatible with the Sainsbury’s merger plan, which must now be blocked,” he added.

Meanwhile, a spokesperson for Sainsbury’s and Asda said that the findings “fundamentally misunderstood how people shop in the UK today and the intensity of competition in the grocery market. The CMA has moved the goalposts and its analysis is inconsistent with comparable cases.”

The tie up would create significant cost savings, which would spark lower prices. “We will be working to understand the rationale behind these findings and will continue to press our case in the coming weeks,” they concluded.