It looks like global retailer Wal-Mart Stores Inc. (NYSE: WMT), owner of the UK-based retailer Asda, may be looking to see if it can enter the bidding war for struggling UK-based supermarket chain J Sainsbury PLC. Wal-Mart seems intent on growing its international presence in markets like China, India and Europe as sales and profit growth in the U.S. remained quite tepid in recent quarters.
The retail food industry has relatively thin margins usually, which makes Wal-Mart's interest in acquiring part or all of Sainsbury intriguing. It may be part of a survival tactic in the European market, as Sainsbury's likeness has been crushed a great deal in recent years by competitor Tesco, UK's largest supermarket chain.
Will Wal-Mart's Asda branch end up entering the battle for control over Sainsbury? The move would have to be approved by British regulators first, but I'd expect Wal-Mart's interest in Sainsbury to remain unless it'd be denied by regulators. I don't see Wal-Mart running away from this interest at all, and in fact, it needs a leg up with its Asda chain to avoid being squeezed out of the marketplace by Tesco.
The retail food industry has relatively thin margins usually, which makes Wal-Mart's interest in acquiring part or all of Sainsbury intriguing. It may be part of a survival tactic in the European market, as Sainsbury's likeness has been crushed a great deal in recent years by competitor Tesco, UK's largest supermarket chain.
Will Wal-Mart's Asda branch end up entering the battle for control over Sainsbury? The move would have to be approved by British regulators first, but I'd expect Wal-Mart's interest in Sainsbury to remain unless it'd be denied by regulators. I don't see Wal-Mart running away from this interest at all, and in fact, it needs a leg up with its Asda chain to avoid being squeezed out of the marketplace by Tesco.
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