Sainsbury's says Asda merger could result in some store sell-offs

LONDON (Reuters) - Sainsbury’s chief executive Mike Coupe said that it was possible that competition authorities would force some stores to be sold to allow the British supermarket chain’s proposed merger with Asda to go ahead.

Sainsbury’s and Asda, the UK arm of Walmart, confirmed on Monday they had agreed a 13.3 billion pounds ($18.3 billion) merger to create Britain’s biggest supermarket group by market share, surpassing current leader Tesco.

The pair said in their statement that there were no planned store closures as a result of the tie-up, but speaking on the BBC Coupe said it was possible a competition probe would require them to divest stores.

“Even if we have to divest stores they will be sold as trading entities,” Coupe told BBC radio.

“We think we’ve got a very compelling case as to why this is good news for customers and ultimately that’s the way that the authorities will look at this and we will engage positively in the process.”

Reporting by Sarah Young, Editing by Paul Sandle