Supermarket Sainsbury’s has won its four-month battle to buy Argos owner Home Retail Group after agreeing a £1.4 billion deal and will set about revamping the general goods retailer.
Sainsbury’s said the move will create a “multi-product, multi-channel” business with around 2,000 stores, concessions and click-and-collect outlets.
“The combined business will offer a multi-product, multi-channel proposition, with fast delivery networks, which we believe will be very attractive to customers and which will create value to both sets of shareholders,” said chairman David Tyler.
Home Retail chairman John Coombe added: “Argos is both an icon of the British high street and also a leader in the digital transformation of UK retailing.
“We are pleased that Sainsbury’s has recognised our progress and our potential with its recommended acquisition of Home Retail Group.”
The deal will see Sainsbury’s pay 0.321 new shares and 55p per share in cash to buy Argos, and will see Home Retail Group shareholders hold 12% of the combined business.
The supermarket said the agreement should be completed in the third quarter of this year.
Sainsbury’s said it will roll out an existing agreement to locate Argos concessions in its supermarkets.
Up to 200 standalone Argos stores out of a portfolio of 845 may close as Sainsbury’s streamlines the business, according to reports.
Since he became chief executive of Home Retail Group in 2014, John Walden has worked to transform the catalogue retail chain into a cutting-edge digital shopping operation. Customers can now order from in-store tablet computers and can pick up products through its click-and-collect service.