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Home Retail backs Sainsbury’s £1.4bn takeover bid or Argos

Sainsbury’s has won the four-month battle to buy Argos after the Home Retail Group’s owner agreed to a £1.4bn takeover.

The supermarket will now set about its mission to create a ‘multi-product, multi-channel’ retailer with around 200 stores.

The deal is scheduled to complete in the third quarter o this year with the sum being paid by Sainsbury’s in a combination of shares and cash. Hoe Retail shareholders will hold 12 per cent of the combined business.

Recent months have seen Sainsbury’s go head-to-head with the South African Steinhoff business in a bid to takeover Argos, however a formal bid never emerged.

Around 200 Argos stores are now expected to close over the coming years as leases expire, with some being relocated to Sainsbury’s supermarkets.

Having secured the deal, Sainsbury’s will aim to take on Amazon as it diversifies away from the ‘ultra-competitive food retail market.’

David Tyler, chairman at Sainsbury’s, said: “We are very pleased the board of Home Retail has recommended our offer for the acquisition of its business to its shareholders.

“The combined business will offer a multi-product, multi-channel proposition, with fast delivery networks, which we believe will be very attractive to customers and which will create value to both sets of shareholders.”

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