Sainsbury’s has made an offer for Home Retail Group (HRG), valuing the business at approximately £1.3 billion, which has been provisionally accepted by the HRG board.
The deal will depend on the success of a proposed deal between HRG and Australian firm Wesfarmers for Argos’ sister brand Homebase.
The 265 UK Homebase sites will be rebranded under the Bunnings banner over the next three to five years. Wesfarmers said it would spend a further £500 million on upgrading the UK store estate.
The board of Home Retail Group has indicated to Sainsbury's that it is willing to recommend the key financial terms of the offer to HRG shareholders, subject to the satisfactory completion of due diligence.
In a statement, HRG said that the combination of HRG and Sainsbury’s would create “a food and non-food retailer of choice for customers, building on the strong heritages of both businesses whose brands are renowned for trust, quality, value and customer service."
The group added: “The combined entity will have attractively-located stores across the UK, with an enhanced supply and delivery network and a strong presence across food and grocery, clothing, homewares, toys, stationery, electricals, furniture and other general merchandise."
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