Sky News editor sees supermarket merger as likelier even after Sainsbury's ended Morrisons talks
Sainsbury's ended preliminary merger talks with Morrisons held earlier this year, according to the FT. Sky News's Mark Kleinman argues in City AM that it is only a pause, with Tesco's lead and the discounters pushing the rest toward a deal.
The Board Room · Leadership desk
Per the FT, Sainsbury's ended the talks with Morrisons. Kleinman says its CEO Simon Roberts cannot afford to be left behind, nor can Asda, Morrisons and their private equity owners. Tesco has rarely looked so firmly entrenched. Aldi and Lidl's emergence makes a deal more plausible.
- decision Sainsbury's Ended the merger discussions with Morrisons, according to the FT, claim 2
- exposure Sainsbury's CEO Simon Roberts Cannot afford to be left behind by his two closest rivals coming together, Kleinman writes, claim 9
- exposure Asda, Morrisons and owners They and their private equity owners need to avoid being left behind, Kleinman says, claim 12
- capability Tesco Its status as market supremo has rarely looked so firmly entrenched, Kleinman says, claim 5
- capability Aldi and Lidl Their emergence makes a deal between two of the big guns more plausible, Kleinman says, claim 8
| Who | How | Kind | Claim |
|---|---|---|---|
| Sainsbury's | Ended the merger discussions with Morrisons, according to the FT | decision | 2 |
| Sainsbury's CEO Simon Roberts | Cannot afford to be left behind by his two closest rivals coming together, Kleinman writes | exposure | 9 |
| Asda, Morrisons and owners | They and their private equity owners need to avoid being left behind, Kleinman says | exposure | 12 |
| Tesco | Its status as market supremo has rarely looked so firmly entrenched, Kleinman says | capability | 5 |
| Aldi and Lidl | Their emergence makes a deal between two of the big guns more plausible, Kleinman says | capability | 8 |
What happened
- Kleinman, who is Sky News's City editor, says he first revealed the preliminary talks on Sky News last week.
- Kantar's market share data puts Sainsbury's in a distant second place, behind a Tesco that Kleinman calls rarely so firmly entrenched.
- He calls it ironic that Aldi and Lidl's rise makes a deal between two big grocers more plausible than when Sainsbury's and Asda tried in 2018.
Why it matters
- decision Sainsbury's chief executive Simon Roberts has to decide whether to reopen talks, because the column says he cannot afford to be left behind if his two closest rivals combine.
- contradiction The company that ended the talks is the one whose return Kleinman calls an open question, so the deal he predicts among any two of three may not include Sainsbury's.
- exposure Asda, Morrisons and their private equity owners face the same pressure to avoid being left behind, so a move by any one pair changes the position of the third.
The column reports two facts: Sainsbury's held preliminary conversations with Morrisons earlier this year [1], and Sainsbury's was the side that ended them, according to the FT [2]. The expectation that talks will come back is Kleinman's judgement, and he writes that it was "a mere pause" [6]. The column does not report any renewed contact between the companies.
His reasons start with Tesco. He describes its position as rarely so firmly entrenched, a little over a decade after an accounting scandal left it racing to secure emergency funds [5]. He then lists three pressures that he says have strengthened since the last round: food insecurity, anxiety about employment costs fuelled by Rachel Reeves' 2024 Budget, and persistent ministerial pressure on competition regulators to be "pro-growth" [7].
The discounters come in as an irony. Aldi and Lidl have become formidable in a sector once regarded as impenetrable to outsiders, and Kleinman says that is a major reason a deal between two of the big grocers is more plausible than when Sainsbury's and Asda tried in 2018 [8]. The comparison is with a single earlier attempt, so it supports a direction only.
The company that left the table is the one Kleinman is least sure about. He wrote: "Whether Sainsbury's is a participant this time around is an open question." [10] The combination he describes is any two of Asda, Morrisons and Sainsbury's [11]. That is a forecast of one deal, and Sainsbury's may not be a party to it.
For Sainsbury's the pressure is stated plainly. Kleinman wrote that chief executive Simon Roberts "cannot afford to be left behind by his two closest rivals coming together" [9]. He adds that the same can be said of Asda and Morrisons and their private equity owners [12]. If Asda and Morrisons reach terms first, Sainsbury's is the one left behind, and the column says Roberts cannot accept that outcome.
We think the direction of the argument is supported and the timing is not. On Kleinman's account, Tesco's lead, the discounters and a more permissive regulatory tone make a deal likelier than in 2018. Nothing in the column dates a restart, and the claim that Sainsbury's ended the talks rests on one FT report as relayed by a columnist. For this quarter, what the record shows is that the talks ended and there is pressure to resume them. "Consolidation is coming" is a forecast with no date, and a reported restart between any two of the three would be the first evidence for it.
What to watch
- Any report of renewed contact between Sainsbury's and Morrisons, or of a first approach involving Asda.
- Whether Asda and Morrisons, through their private equity owners, open talks with each other before Sainsbury's re-engages.
- Whether ministers' pro-growth pressure on competition regulators becomes explicit guidance that applies to grocery mergers.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence35
- Adoption
- Insufficient
- Hype gap+25
- Incentives40
- Confidence40
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
J Sainsbury held preliminary merger conversations with smaller rival Morrisons earlier this year.
- [2]
According to the FT, it was Sainsbury's which terminated the discussions with Morrisons.
- [3]
Kleinman says he revealed the Sainsbury's-Morrisons talks on Sky News last week.
- [4]
Sainsbury's is in a distant second place as measured by Kantar's market share data.
- [5]
Tesco's status as market supremo has rarely looked so firmly entrenched, not much more than a decade after a near-death experience triggered by an accounting scandal that left it racing to secure an emergency warchest.
- [6]
Kleinman says there is good reason to believe the end of the talks was a mere pause, not a final halt to negotiations over a combination of any two of Asda, Morrisons and Sainsbury's, and that the impetus for a transaction has strengthened since the last round of discussions.
- [7]
Kleinman cites heightened food insecurity, growing anxiety about employment costs fuelled by Rachel Reeves' 2024 Budget, and persistent pressure from ministers on UK competition regulators to be 'pro-growth' as pointing toward a greater likelihood of a deal.
- [8]
Kleinman calls it ironic that the emergence of Aldi and Lidl as formidable players in a sector previously regarded as impenetrable to outsiders is a major contributor to a deal between two of the big guns being more plausible than when Sainsbury's and Asda tried to come together in 2018.
- [9]
Kleinman wrote that Sainsbury's chief executive Simon Roberts "cannot afford to be left behind by his two closest rivals coming together".
- [10]
Kleinman wrote: "Whether Sainsbury's is a participant this time around is an open question."
- [11]
The combination Kleinman describes would bring together any two of Asda, Morrisons and Sainsbury's.
- [12]
Kleinman says the same can be said of both Asda and Morrisons, and their private equity owners, as of Sainsbury's: they need to avoid being left behind.
- [13]
Simon Roberts needs to revive a meaningful growth story for Sainsbury's investors.
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Sources
1 independent publisher whose own reporting we read for this story.
- cityam.comMark Kleinman: Every Lidl helps a new era of supermarket mergers
1 article · October 14, 2026
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