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Sainsbury's is prepared to pay £1.3 billion for Argos

The supermarket has until February 23rd to wrap it all up.
Matt Brian, @m4tt
02.02.16 in Home
Chris Ratcliffe/Bloomberg via Getty Images

Sainsbury's mission to expand its non-food empire has been given a big boost after it agreed terms on a £1.3 billion bid for Argos owner Home Retail Group. With its latest proposal, the supermarket, which had an earlier offer believed to be around the £1 billion mark turned down, now has until February 23rd to decide whether it wants to make everything official.

The grocery chain is buying Argos to serve customers "wherever and whenever they want to shop." Sainsbury's already hosts a small number of Argos outlets inside its stores, but wants to capitalize on its partner's same-day delivery network to fight back against supermarket rivals like Ocado, but also Amazon, which is said to be readying its own fresh food delivery service.

If a deal is agreed, Sainsbury's believes it could reduce costs by as much as £120 million. However, it forecasts that it would need to spend £140 million converting stores and merging the brands (like Dixons Carphone is now doing with the Currys PC World and Carphone Warehouse brands). There's also the possibility that Sainsbury's will ditch the Argos brand altogether, giving it a bigger footprint than both John Lewis and M&S on the High Street.

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