Sainsbury’s confirm Argos Home Retail bid
It’s been the big story for retail all year as the will they won’t they saga between Sainsbury’s and Home Retail owned Argos has played out.
Finally on Friday, the deadline set by the CMA, Steinhoff, the South African rival bidder dropped out of the race and Sainsbury’s submitted a formal offer to Home Retail of £1.4bn mix of shares and cash.
The original bid came after a successful partnership between Sainsbury’s and Argos resulted in Argos concessions in several Sainsbury’s stores. It’s widely thought that should the offer be accepted, an expansion of this is likely, giving Sainsbury’s the chance to cut costs by closing expensive rented Argos high street properties and replacing them with in store concessions.
It’s what comes after that though which everyone will be watching, as the pairing of a large, established digital and high street retailer with Britain’s second biggest supermarket could provide the biggest challenge yet to a company like Amazon, looking to break into the UK food market by partnering with Morrison’s.