Sainsbury's, Britain's second-largest supermarket chain, held preliminary talks with rival Morrisons about a potential multibillion-pound merger, according to reports citing people familiar with the discussions. The talks ran between November 2025 and February 2026 before Sainsbury's decided to step away.
Morrisons, the UK's sixth-largest grocer according to one report, is privately owned by US private equity firm Clayton Dubilier & Rice (CD&R), which bought the chain in 2021. Sainsbury's, Morrisons and CD&R all declined to comment on the reports when approached.
What Was Discussed
The exploratory discussions reportedly centred on combining the two supermarket groups, a deal that would have ranked among the largest tie-ups in the UK grocery sector in more than five years. Sources familiar with the matter said CD&R would remain open to a future tie-up with one of its competitors, even though the talks with Sainsbury's did not proceed.
No active negotiations are currently under way between the two companies. People close to the situation did not rule out the possibility that talks could restart in the future.
Market Share and Competition Concerns
A combined Sainsbury's-Morrisons business would hold roughly 23.6% of the UK grocery market, based on figures cited in reporting, narrowing the gap with market leader Tesco, which controls about 27.8%. Sainsbury's alone holds around 15.2% of the market, while Morrisons holds about 8.4%.
Any such deal would draw scrutiny from the Competition and Markets Authority (CMA), the UK's antitrust regulator. The CMA blocked Sainsbury's proposed £7.3 billion acquisition of Asda in 2019, ruling that the combination would reduce competition and risk pushing up prices for shoppers. A Sainsbury's-Morrisons deal would likely face comparable scrutiny and could require the companies to divest stores to address competition concerns, according to reporting.
UK Grocery Market Share Comparison| Retailer | Estimated Market Share | Status |
|---|
| Tesco | ~27.8% | Market leader |
|---|
| Sainsbury's | ~15.2% | Second-largest |
|---|
| Combined Sainsbury's-Morrisons | ~23.6% | Hypothetical, if merger proceeded |
|---|
| Morrisons | ~8.4% | Privately owned by CD&R |
|---|
Company Scale and Financial Background
Sainsbury's operates more than 600 supermarkets and close to 900 convenience stores, according to reporting. Morrisons runs approximately 500 supermarkets alongside more than 1,700 convenience outlets. Morrisons has also been reported to carry substantial debt, cited at around £7.5 billion in net debt as of October 2025, a legacy of its 2021 leveraged buyout by CD&R.
Reporting also noted that Sainsbury's has experienced slower underlying sales growth in recent quarters compared with Morrisons, which reported quarterly sales growth over the same period. Sainsbury's shares showed only a minor movement, falling around 0.3%, after news of the talks and their collapse became public.
What Remains Unknown
Neither company has confirmed the existence or details of the talks on the record. The precise reasons Sainsbury's withdrew from the discussions have not been disclosed by either party. It is also not known whether CD&R has approached, or been approached by, other potential partners for Morrisons since the talks with Sainsbury's ended.
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