Sainsbury’s is trying to buy Argos for £1.3bn - here's why

The deal will depend on the outcome of another sale

Sainsbury’s has offered £1.3bn in an attempt to buy Argos.

This isn’t the first time the supermarket has tried to buy Argos from Home Retail, the company which owns it and other high street stores. Last month, it was revealed an offer made in 2015 was rejected.

The sale will depend on whether Home Retail sells Homebase to Australian company Wesfarmers for £340m as planned, a move which will see Homebase in the UK rebranded as Bunnings.

The offer by Sainsbury’s is 63% above Home Retail’s share price in on 4 January, at 161.3p a share.

Sainsbury’s plans to move many Argos branches into Sainsbury’s stores as the leases expire on the buildings, which will initially cost £140m in the first three years but then save £120m a year by 2019.

 

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