UK's Sainsbury's ends talks to sell Argos to China's JD.com

By Chandni Shah

(Reuters) - British supermarket group Sainsbury's said on Sunday it has terminated talks with Chinese e-commerce giant JD.com over selling the Argos general merchandise retailer, a day after confirming discussions were underway.

"JD.com has communicated that it would now only be prepared to engage on a materially revised set of terms and commitments, which are not in the best interests of Sainsbury's shareholders, colleagues and broader stakeholders" the company said in a statement.

The company repeated its forecast for retail underlying operating profit of around 1 billion pounds ($1.36 billion) for the 2025–2026 financial year.

JD.com declined to comment.

Sainsbury's, which has been focusing more on food since Simon Roberts became CEO in 2020, had on Saturday confirmed it was in talks with JD.com for the sale of Argos.

Argos, which Sainsbury's bought in 2016 for 1.1 billion pounds, is Britain's second-largest general merchandise retailer, with the third most-visited retail website in the country and more than 1,100 collection points.

Britain's second-largest supermarket group, trailing only Tesco, said on Sunday that it is committed to driving improvements at Argos after the business traded in line with expectations over the summer, helped by good weather.

"We are taking focused action to extend range, enhance digital capabilities and improve relevance to grow frequency and spend in Argos," Sainsbury's said in its statement.

London-listed Sainsbury's is valued at 7.05 billion pounds ($9.56 billion), while Hong Kong-listed JD.com has a market capitalisation of HK$418.76 billion ($53.82 billion), according to LSEG data.

Sainsbury's in July sold off its Sainsbury's Bank's travel money business to Fexco Group.

This has followed last year's sale of Sainsbury's Bank's personal loan, credit card and retail deposit portfolios to NatWest Group , the disposal of its cash machines business to NoteMachine and the sale of the Argos Financial Services cards portfolio to NewDay Group.

($1 = 0.7377 pounds)

($1 = 7.7802 Hong Kong dollars)

(Reporting by Chandni Shah in Bengaluru, Editing by Louise Heavens)