London: British supermarket group Sainsbury’s yesterday said it had clinched a £1.4-billion takeover of Home Retail Group, owner of catalogue chain Argos.
The cash-and-stock offer, worth the equivalent of $2bn, is aimed at creating a “multi-product, multi-channel” business, the pair said in a joint statement.
Argos sells household items, including televisions, furniture and gardening tools.
“The boards of Sainsbury’s and Home Retail Group are pleased to announce that following further discussions, the Home Retail Group directors now intend unanimously to recommend the acquisition,” the statement said.
Sainsbury’s will pay 0.321 new shares and 55p per share in cash to buy Argos, in a deal which gives Home Retail Group shareholders 12 per cent of the combined business.
The deal was expected to complete in the third quarter of this year, subject to regulatory and shareholder approvals.
“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,” added Sainsbury’s chairman David Tyler.
The sale of HRG’s home improvements and gardening chain Homebase to Australian business Wesfarmers is a condition of the deal going through.
South African household goods group Steinhoff decided last month to walk away from the bidding process for Home Retail Group, clearing the way for Sainsbury’s.
At the same time, French household goods group Conforama – which is majority-owned by Steinhoff – agreed a deal to buy electricals retailer Darty.