Sainsbury's calls off talks to sell Argos after JD.com seeks revised terms
Supermarket group says proposed changes from Chinese e‑commerce giant were 'not in the best interests' of shareholders, ending a potential deal
Sainsbury's has terminated discussions to sell Argos to Chinese e‑commerce group JD.com after the bidder sought a materially revised set of terms that the supermarket group described as unacceptable.
The supermarket confirmed on Sunday that talks, disclosed earlier in the weekend, had been ended because JD.com "has communicated that it would now only be prepared to engage on a materially revised set of terms and commitments which are not in the best interests of Sainsbury's shareholders, colleagues and broader stakeholders." Sainsbury's said it had therefore "terminated discussions with JD.com."
Sainsbury's acquired Argos in 2016 for £1.4 billion and subsequently integrated hundreds of standalone Argos outlets into its supermarket estate to offer customers item collection alongside grocery shopping. The group described Argos as the UK's second-largest general merchandise retailer, the owner of the third most visited retail website in the country and operating more than 1,100 collection points.
JD.com is one of the world's largest online retailers, with about 600 million annual shoppers, roughly £120 billion in turnover and around 700,000 employees. The company, which is principally active in Asia, has been pursuing international expansion and is led by founder and chairman Richard Qiangdong Liu.
Sainsbury's said Argos has been trading in line with expectations over the summer and that first-half sales and profitability were stronger compared with a year earlier, when second-quarter results were boosted by clearance activity. The supermarket group added that it remained committed to its "More Argos, more often" transformation strategy, focusing on extending range, enhancing digital capabilities and delivering further operating-model efficiencies to grow frequency and spend.
The group reiterated guidance issued earlier for the 2025-26 financial year, saying it continued to expect retail underlying operating profit of around £1 billion and retail free cash flow of more than £500 million. Sainsbury's shares rose about 3.1% to 316.8 pence in early trading on Monday.
The collapse of the talks removes a potential move that would have handed control of a major British general merchandise business to a large China-based online retailer. Sainsbury's said it remained focused on delivering its Next Level strategic commitments and on securing the strongest future for Argos customers and colleagues.
Analysts and investors will now watch how Sainsbury's pushes ahead with its transformation plans for Argos and whether other bidders emerge for some or all of the business as the group seeks to strengthen its position against online competitors.