Weekend news of a merger between Sainsbury’s (SBRY) and Walmart-owned Asda is sending shockwaves through the groceries sector this morning.
The tie-up between the number two and three supermarket brands in the UK will see the combined entity become the market leader ahead of Tesco (TSCO) - assuming it is cleared. This explains a 17.4% surge in Sainsbury’s shares to 316.7p. You can read about the details behind the transaction here.
In volatile trading Tesco itself is down 3.8% to 229p, Morrisons (MRW) falls 2.2% to 234.8p and Marks & Spencer (MKS) slips 0.9% to 284.1p, convenience foods business Greencore (GNC) falls 3% on 155.9p on fears a dominant new player will make life more difficult for suppliers. Electronics retailer Dixons Carphone (DC.) falls 4.9% to 194.1p as the transaction involves Argos being introduced into Asda stores.
In other news the FTSE 100 trades 0.4% higher at 7,528.44 after strong trading overnight in Asia. Advertising giant WPP (WPP) updates on trading for the first time since the resignation of its founder and chief executive Martin Sorrell. Despite a mixed first quarter the stock ultimately advances 8.5% to £12.47 as the company reiterates full year guidance.
Mining firm Glencore (GLEN) falls 2.7% to 358.9p as investors react to an late Friday announcement that it had been served freezing orders on its assets in the Democratic Republic of Congo for alleged unpaid royalties of $3bn from a company affiliated with Irish billionaire Dan Gertler.
Paper firm Mondi (MNDI) gains 0.8% to £20.47 as it reveals the €23.7m acquisition of Egypt’s NPP.
Oil explorer Chariot Oil & Gas (CHAR:AIM) falls 30% to 8.3p as it fails to find hydrocarbons with its Rabat Deep 1 well in Morocco.
