Asda eyes up potential takeover bid for B&M

Supermarket chain Asda is said to be looking at a £4.4bn bid for discount chain B&M as the battle between the UK’s Big Four supermarkets heats up again.

Senior Asda executives have downplayed the rumours of an acquisition, saying that it was US parent company Walmart that was responsible for mergers and acquisitions, according to the Telegraph.

B&M European Value Retail was founded in Liverpool in 1978 and now has 500 stores, with the backing of the billionaire Arora brothers.

It has been suggested that Asda would use the cash-and-carry company’s 500-strong network to sell more of its George clothing label, to combat decline in other areas of the business.

Trevor Green, fund manager at Aviva Investors which hold a 0.3pc stake in B&M, said that the “customer fit between the two is obviously excellent” but questioned whether Walmart would want to increase its exposure to the volatile and competitive UK grocery market.

Asda has seen sales dwindle over the past three years, with 11 consecutive quarters of decline, leading to the exit of chief executive Andy Clarke, who was replaced by Walmart international executive Sean Clarke last year.

Though a takeover may not be imminent, a bid for Liverpool-based B&M by the Leeds-based chain would be no surprise, with the UK’s supermarkets locked in a battle for customers and sales, as discounters Lidl and Aldi steadily creep up the food chain and outperform their better-established rivals.

Similar acquisitions have been made by the Big Four supermarkets over the past year, including the acquisition of Argos owner Home Retail by Sainsbury’s. Tesco’s £3.7bn acquisition of wholesaler Booker ignited interest in the sector, with Sainsbury’s now looking at a deal for Nisa Retail, based in Scunthorpe.

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