Sainsbury’s and Morrisons held talks over blockbuster merger
Sainsbury’s walked away from talks over a merger with smaller rival Morrisons earlier this year, shelving what would have been the biggest shake-up of the UK’s grocery market in decades.
The UK’s second-largest supermarket chain held preliminary talks with its private-equity-owned rival over a merger of the two firms between November 2025 and February this year, it is understood.
There are no active talks between the two sides but the two parties have not ruled out the possibility of discussions restarting in the future.
Sainsbury’s attempted to buy discount grocer Asda for £7.3bn in 2019, but had this deal blocked by the Competition and Markets Authority (CMA) on the grounds it would reduce competition and push up prices for shoppers.
A deal to combine Sainsbury’s and Morrisons would inevitably draw the scrutiny of the CMA, which could force the firm to sell stores to soothe fears of lessened competition.
Sainsbury’s holds a 15.2 per cent share of the UK’s grocery market, while Morrisons has a 8.4 per cent share, according to Worldpanel by Numerator.
A combination of the two grocers would take their presence in the market to 23.6 per cent, widening the gap on Asda and Aldi but still below Tesco’s 27.8 per cent. Talks between Sainsbury’s and Morrisons were first reported by Sky News’ Mark Kleinman.
Morrisons creaks under debt pile
Sainsbury’s chief executive Simon Roberts has pushed the supermarket chain to focus on its food sales, which jumped by three per cent to £8bn in the three months to June.
In July, the group sold Argos to Swift Partners for £120m, after buying the catalogue retailer for £1.4bn a decade ago.
Morrisons, the UK’s sixth-largest supermarket chain, has been weighed down by a huge debt pile since its takeover by the New-York based Clayton Dubilier & Rice in 2021.
The group’s net debt grew from £7.1bn to £7.5bn in the year to October 2025 but the grocer last month posted sales growth for the fifteenth consecutive quarter.
Rami Batiéh, who joined Morrisons in 2023, said his turnaround of the grocer is delivering a “broad-based improvement” across the group as he battles to cut costs and keep prices down.
Sainsbury’s operates more than 600 supermarkets and nearly 900 convenience stores. Morrisons runs about 500 supermarkets and more than 1,700 convenience outlets.
Shares in Sainsbury’s fell on news of the collapsed talks, to a loss of about 0.3 per cent at 322p.
Morrisons and Sainsbury’s declined to comment.