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[Brett-Butler]

From the BBC:

Merger talks between British supermarket chains Sainsbury's and Asda are at a reasonably advanced stage, BBC business editor Simon Jack confirmed.

The two brands are expected to be retained should a merger go ahead.

Sainsbury's and Asda - the UK arm of Walmart - are the second and third largest supermarkets in the UK.

The combined group would comprise 2,800 stores and would represent around 30% of the UK grocery market - similar to that of market leader Tesco.

George MacDonald, editor of Retail Week, said the grocery industry had been shaken up by low-cost supermarkets such as Aldi and Lidl.

"So maybe this type of mega deal will get the go ahead by the Competition and Markets Authority," he said.

"This is quite audacious by Sainsbury's - given it has only recently bought Argos. It's symptomatic though of the restructuring of the supermarket industry."

It sounds as if both supermarkets will still retain their branding, so we won't see either Asda or Sainsburys disappearing off the high street, which makes sense, as they do seem to have different markets, with Sainsbury's being seen as slightly more "upmarket". The deal will still have to go through the Competition Commission, so they may have to sell off some of their stores for the deal to go through.