Sainsbury’s and Asda have agreed terms for a proposed merger, which is likely to be investigated by the Competition and Markets Authority.
The combined group of the UK’s second and third largest supermarkets would total 2,800 stores and would represent 31.4% of the UK grocery market.
Mike Coupe, Sainsbury’s chief executive said: "This is a transformational opportunity to create a new force in UK retail, which will be more competitive and give customers more of what they want now and in the future.