Sainsbury’s offers £1.3bn for Argos

SAINSBURY’S has struck a £1.3bn deal to buy Argos owner Home Retail Group that will see it close around 200 shops across Britain.

The takeover is an attempt to compete with online rivals such as Amazon and help both businesses compete on the High Street. The deal will mean shoppers will be able to buy Argos products in Sainsbury’s shops and the supermarket’s customers will have access to Argos’ four-hour time slots for home deliveries.

Sainsbury’s (up 5.9p to 250.5p) boss Mike Coupe said the takeover will create the ‘largest non-food’ retailer in the country with more than 2,000 shops selling 100,000 non-food products.

Argos’ online and mail-order customers will also be able to click ’n’ collect their kettles and bikes from Sainsbury’s stores. Coupe described the takeover as baking a bigger cake to create a better and larger business for customers.

However, one investment manager described it as two struggling retailers ‘propping each other up’.

Sainsbury’s, like other supermarkets, has struggled against discount retailers Lidl and Aldi, the rise of online shopping and the shift to people shopping little and often rather than doing large weekly shops.

Between 150 and 200 Argos shops could be closed and moved into a Sainsbury’s, but the deal is not quite sealed. The firms have agreed a threeweek extension on yesterday’s deadline to complete the due diligence on the offer.

Home Retail (up 0.1p to 153p) shareholders will own 12pc of Sainsbury’s when the deal goes through.