Sainsbury's held merger talks with Morrisons earlier this year, reports say

Media reports published on Monday 5 October 2026 said Sainsbury's held merger talks with Morrisons earlier this year. The Guardian and Reuters both carried the reports. Their existence is confirmed. Whether the talks took place has not been confirmed on the record by any company involved.

Sainsbury's is Britain's second-largest grocer.

What is reported

According to the Financial Times and Sky, as cited by The Guardian, Sainsbury's and Morrisons held exploratory merger negotiations this year. The Guardian reported that the two companies are believed to be no longer in live discussions. It does not say who holds this belief. Both companies declined to comment, according to The Guardian.

Sky reported that Clayton Dubilier & Rice (CD&R), the US private equity firm that owns Morrisons, is open to a tie-up between Morrisons and another major supermarket. Sky also reported that Asda, which is majority-owned by private equity firm TDR Capital, could be drawn into deal talks.

According to The Guardian, CD&R bought Morrisons in 2021. The deal left Morrisons with more than £7bn of debt on its balance sheet. The Guardian also reported that Lidl overtook Morrisons in UK grocery market share this year.

Analysts at Worldpanel by Numerator said a combined Sainsbury's-Morrisons business would have had a 23.6% market share, compared with 27.8% for Tesco, The Guardian reported. Sainsbury's alone has a 15.2% share and employs about 140,000 people.

Sainsbury's shares were flat on Monday afternoon, according to The Guardian. The stock is down 3% so far this year, compared with a 6% rise for Tesco. In the summer, Sainsbury's agreed to sell Argos for £120m, a decade after buying the chain for more than £1bn.

What each side says

• Sainsbury's and Morrisons: declined to comment.
• Competition and Markets Authority (2019): it blocked a proposed £7bn merger between Asda and Sainsbury's, on the basis that the deal would result in a loss of competition and higher prices for customers.
• Lidl GB: it reported that annual revenue rose 10% to more than £13bn, and that pre-tax profits at its British arm rose 30% to £245.5m in the year to February. It linked this to shoppers seeking cheaper fresh meat, fruit and vegetables, and its Deluxe range.

What is not known

Vocemundi did not review the original Financial Times and Sky reports. Their details are known only as relayed by The Guardian. Reuters' coverage credits unnamed media reports. The reports reviewed by Vocemundi do not describe when the talks began or ended, who initiated them, or why they stopped. The Guardian described the deal discussed as multibillion-pound, but the reports do not give a specific valuation, proposed structure or terms. They do not include comment from CD&R, Asda or TDR Capital, and do not describe whether Asda or TDR Capital took part in any talks.

Analysis

If the reported talks did take place, they would point to continued pressure for consolidation among UK supermarkets, as discount chains such as Lidl gain share. Any future combination of large grocers would likely face scrutiny from the Competition and Markets Authority, which blocked the Asda-Sainsbury's deal in 2019 over competition and price concerns. A combined share below Tesco's could feature in any such debate, but the regulator's view cannot be assumed. The talks are reported to be no longer live. They could resume, involve other parties such as Asda, or not resume at all. The reports reviewed do not indicate which is more likely.

Produced by the Vocemundi newsroom with AI assistance.