Slaughter and May is advising Walmart Inc. (Walmart) on the proposed combination between J Sainsbury plc (Sainsbury) and Asda Group Limited (Asda), a wholly-owned subsidiary of Walmart, to create an enlarged business. Following completion of the combination, both entities will retain their current names and will continue to operate both the Asda and Sainsbury brands in the UK.
To effect the combination, Sainsbury will issue to Walmart ordinary shares representing 42% of the post-transaction enlarged issued share capital of Sainsbury, comprising 29.9% voting ordinary shares and 12.1% non-voting ordinary convertible shares. Sainsbury will also pay £2.975 billion in cash to Walmart.
The transaction constitutes a reverse takeover for Sainsbury, so, in due course, an application will be made to the UKLA for the ordinary shares of Sainsbury to be re-admitted to the Official List of the UKLA and to trading on the main market for listed securities of the London Stock Exchange.