Grocery giant Asda plays down B&M takeover speculation
This article contains affiliate links. We may earn a small commission on items purchased through this article, but that does not affect our editorial judgement.
However, the pouring of cold water on reports of what would be the latest in a flurry of consolidation involving the supermarket sector failed to stop B&M’s shares jumping markedly. The stock closed up almost 5 per cent at 357.5p yesterday.
• READ MORE: Asda sees positive momentum despite fresh sales fall
Advertisement
Hide AdAdvertisement
Hide AdB&M is owned by the billionaire Arora brothers, and has former Tesco boss Sir Terry Leahy as chairman. The Aroras have built the group into a 500‑store player since taking control in 2004.
Analysts said that acquiring the chain would give Asda access to a network of high street shops through which to distribute its products, including the George clothing range.
Clive Black, analyst at Shore Capital, said: “B&M would bring great capability in general merchandise value retailing for Asda, with its strong range, authority, pricing and space growth, whilst providing George, Asda’s excellent apparel brand, the scope for space growth in largely complementary locations. B&M is also increasingly effective in grocery. Cost synergies would be potentially evident in central overheads, sourcing and logistics.”
A deal would also release pressure on Asda’s core supermarket business, which has seen years of sales declines amid rising competition.