J Sainsbury plc (LSE:SBRY) entered into a merger agreement to acquire ASDA Group Limited from Walmart Inc. (NYSE:WMT) for £7.3 billion on April 30, 2018. Under the terms of the combination, Sainsbury's will, in exchange for the entire issued share capital of ASDA, issue to Walmart, £4.3 billion in Sainsbury's ordinary voting shares representing 29.9% of Sainsbury's enlarged ordinary voting share capital and ordinary non-voting shares, which are convertible into ordinary voting shares, such that Walmart will hold 42% of the issued equity share capital of the combined business and pay £2.975 billion in cash to Walmart, subject to customary completion adjustments, valuing ASDA at approximately £7.3 billion on a debt-free, cash-free and pension-free basis. The cash element of the consideration will be covered initially by third party bank finance and, in time, replaced with longer term funding. As of July 4, 2018, a £3.5 billion financing package has been agreed. In case of termination of the deal, a break fee equal to 1% of Sainsbury's market capitalization will be payable by Walmart or Sainsbury.

Upon completion, two Walmart representatives will join the Board of the combined business as Non-Executive Directors. The combined business will be chaired by the Sainsbury's Chairman and led by the Sainsbury's Chief Executive Officer and Chief Financial Officer. ASDA will continue to be run from Leeds with its own Chief Executive Officer, who will join the Group operating Board of the combined business. The transaction is conditional upon Sainsbury's shareholder approval, recommendation by Sainsbury's Board, Competition and Markets Authority approval, approvals in connection with the ASDA defined benefit pension scheme, other regulatory approvals, change in control approval from the Prudential Regulatory Authority in respect of Sainsbury's Bank, change in control approval from the Financial Conduct Authority in respect of certain ASDA and Sainsbury's regulated entities, financing of the cash consideration payable by Sainsbury's, approval from certain lenders under Sainsbury's current financing arrangements and the entry into certain ancillary agreements, including a transitional services agreement (covering predominantly IT related services), a co-operation agreement and a trade mark license agreement. The Qatar Investment Authority, Sainsbury's largest shareholder, has confirmed its current intention to support the transaction. As of September 19, 2018, CMA announced the opening of a full investigation of takeover of ASDA Group. As of November 9, 2018, Sainsbury has made a fresh appeal to CMA for the approval of the merger. As of December 12, 2018, J Sainsbury plc and ASDA lodged an application with the Competition Appeal Tribunal for a judicial review of the Competition and Markets Authority's phase two investigation into their proposed merger. As of December 13, 2018, Competition and Markets Authority will notify about its decision in January 2019 or early February 2019. Competition and Markets Authority (CMA) regulator is due to publish its provisional findings on the deal by early February 2019 and its final report in early March 2019. Any extension of the final deadline, by up to eight weeks, is a decision for the CMA and would likely not be made public until it publishes its provisional report. As of January 18, 2019, court ruling has indicated that a final regulatory verdict on the takeover will be moved to the end of April 2019. As of February 11, 2019, Competition & Markets Authority extended the statutory deadline for a decision on the transaction to April 30, 2019 from March 5, 2019. Completion of the transaction is expected in the second half of calendar year 2019. The transaction will result in double digit EPS accretion.

Hew Glyn Davies, Ian Hart and Anna Richardson Brown of UBS Limited and Paul Baker, Nick Bishop and Anthony Zammit of Morgan Stanley & Co. International plc acted as financial advisors and brokers for Sainsbury. Majid Ishaq, Christopher Lawrence and Lauren Cowan of N M Rothschild & Sons Limited acted as financial advisors for Walmart. Ali Nekpay and Deirdre Taylor of Gibson, Dunn & Crutcher LLP acted as legal advisors to Walmart. Ian Fenn, Michael Honan, Nicole Kar, Simon Pritchard and Margot Lindsay of Linklaters LLP acted as legal advisors to Sainsbury. Sally Wokes, Victoria MacDuff, Nigel Boardman, Nick Johnston, Natalie Cook, Tom Fletcher, Wallis Rushforth, Matthew Carey, Christina Sweeney-Baird, Hector Penny, Guy O'Keefe, Charlie McGarel-Groves, Steve Edge, Orlaith Kane, Alicia Tan, Charles Cameron, Rebecca Carter, Rosemary Nelson, Cathy Connolly, Laura Houston, Matthew Harman, Daniel Owen, Jane Edwarde, Gemma Goddard, Kate Shirlaw, Ben Kingsley and Kirsty Renshaw of Slaughter and May acted as legal advisors to Walmart. Credit Suisse International acted as financial advisor to Walmart Inc. David Robson, Alice Jefferis, Sharif and Hanna Majed of Clifford Chance acted as legal advisors for UBS Limited. Citigroup Inc. acted as financial advisor to ASDA.

J Sainsbury plc (LSE:SBRY) cancelled the acquisition of ASDA Group Limited from Walmart Inc. (NYSE:WMT) on April 25, 2019. The Competition and Markets Authority (CMA) published its Final Report on the proposed merger resulting in prohibition of the merger. As a result, Sainsbury's, Walmart and Asda mutually agreed to terminate the transaction.