Sainsbury's Held Morrisons Merger Talks; Deal Would Create UK Grocery No. 2

Sainsbury's held preliminary merger talks with Morrisons between November 2025 and February 2026 before walking away, The Financial Times reported Monday, leaving the smaller grocer a potential takeover target. A combination would control 23.6pc of Britain's grocery market, close to Tesco's 27.8pc, according to Worldpanel by Numerator. Sainsbury's holds 15.2pc and Morrisons 8.4pc. No active talks are underway, but negotiations may restart. Any deal would face close scrutiny from the Competition and Markets Authority, which blocked Sainsbury's £7.3bn bid for Asda seven years ago. Aldi and Lidl have since expanded to a combined 19pc share, pressuring traditional chains. Morrisons, taken private by Clayton, Dubilier & Rice in 2021, carries £7.5bn in net debt. Sainsbury's shares rose 0.2pc Monday. Both companies declined to comment.