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UK grocer Sainsbury's held merger talks with rival Morrisons, reports say - Finance news and analysis from Global Banking & Finance Review
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UK grocer Sainsbury's held merger talks with rival Morrisons, reports say

Published by Global Banking & Finance Review

Posted on October 5, 2026

2 min read

· Last updated: October 5, 2026

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Sainsbury's and Morrisons Considered Major UK Grocery Merger, Reports Say

Details Emerge on Sainsbury's and Morrisons Merger Talks

Oct 5 (Reuters) - Sainsbury's, Britain's second-largest grocer, held talks with smaller rival Morrisons about a merger earlier this year, according to media reports on Monday.

Overview of the Proposed Merger

• The companies were considering a potential multibillion-pound deal before Sainsbury's walked away, an FT report said, citing people familiar with the matter

• The talks took place between November 2025 and February this year, the FT report said, adding that talks are no longer active

Possibility of Future Negotiations

• People close to the situation did not rule out negotiations restarting in the future, the FT report said

Official Responses

• Spokespeople for both Sainsbury's and US private equity firm-owned Morrisons declined to comment on the report

Recent Performance and Historical Context

Sales Growth and Market Position

• While Sainsbury's reported slower underlying sales growth in its most recent quarter, Morrisons, the UK's sixth-largest grocer, reported growth in quarterly sales

Previous Regulatory Challenges

• In 2019, Britain's competition regulator blocked Sainsbury's proposed £7.3 billion takeover of Asda

Ownership and Investment Developments

Morrisons' Ownership and Future Prospects

• Morrisons' owner, private equity firm Clayton Dubilier & Rice, would remain open to a tie-up with one of its competitors, Sky News reported, citing retail insiders

Acquisition History

• Clayton, Dubilier & Rice won an auction to buy Morrisons for £7 billion in 2021, beating a consortium led by SoftBank-owned Fortress Investment Group

Stock Market Reaction

• Shares of Sainsbury's were little changed on Monday and marginally down so far this year

Reporting Credits

(Reporting by Simone Lobo in Bengaluru, additional reporting by James Davey in London; Editing by Shinjini Ganguli)

Key Takeaways

  • Preliminary merger talks took place between November 2025 and February 2026, but Sainsbury’s walked away from the deal (sharecast.com)
  • A combined Sainsbury’s‑Morrisons group would control roughly 23.6% of the UK grocery market, narrowing the gap with Tesco, but would face intense regulatory scrutiny, likely requiring store disposals (sharecast.com)
  • Morrisons is burdened by heavy debt under private‑equity owner Clayton, Dubilier & Rice, increasing complexity of any merger; talks are inactive now, though could restart (retailgazette.co.uk)

References

Frequently Asked Questions

Did Sainsbury's and Morrisons discuss a merger?
Yes, Sainsbury's and Morrisons held merger talks earlier this year, according to media reports.
Why did Sainsbury's and Morrisons end merger talks?
Sainsbury's walked away from talks with Morrisons, and the discussions are no longer active.
Will Sainsbury's and Morrisons restart merger negotiations?
While talks have ended, sources did not rule out the possibility of negotiations restarting in the future.
Who owns Morrisons?
Morrisons is owned by US-based private equity firm Clayton, Dubilier & Rice.
How did Sainsbury's and Morrisons perform recently?
Sainsbury's reported slower sales growth, while Morrisons saw growth in quarterly sales.

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