Business

Sainsbury's 'convinced' by Argos deal despite EU vote

Argos store Image copyright PA

Sainsbury's has insisted its deal to buy Argos owner Home Retail Group will go ahead despite increased economic uncertainty since the EU vote.

Chief executive Mike Coupe acknowledged economic conditions had changed but said the supermarket remained "committed to making the deal happen".

"We remain absolutely convinced by the strategic rationale," he said.

Sainsbury's agreed the £1.4bn takeover of Home Retail in April, planning to pay a combination of shares and cash.

However in the three months since then the supermarket group's shares have fallen 19%, reducing the value of the deal to around £1.3bn.

Mr Coupe said the prospectus for the acquisition, issued on Tuesday, noted that the economic conditions had changed since the takeover was announced.

'Early days'

But he said it was still too early to understand the impact of the UK's plans to leave the EU on the combined business.

"I think it's very early days... There is a slight danger that we talk our way into an economic downturn as well," he said.

"To predict the future off 10 days' worth of data I think is impossible," he said.

Mr Coupe said whatever happened he was confident the deal would create a much stronger business for the future.

In the prospectus, the supermarket said it expected to employ 1,000 more people as a result of the deal, partly to staff more click-and-collect points.

Sainsbury's has said it hopes to complete the deal by the end of September.

However, it is still under scrutiny by the competition regulator, which has said it will decide by 25 July whether or not to launch a full inquiry.

The supermarket announced on Monday it would close its Netto stores in August after abandoning a joint venture with a Danish retailer.

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