Sainsbury's ends talks to sell Argos after JD.com seeks revised terms
Supermarket group says Chinese e‑commerce giant proposed 'materially revised' commitments that were not in shareholders' interests
Sainsbury's has terminated discussions to sell its Argos business to Chinese online retailer JD.com after the potential buyer sought changes to the deal that the supermarket group described as "not in the best interests of Sainsbury's shareholders, colleagues and broader stakeholders."
The announcement late on Sunday came after Sainsbury's had confirmed over the weekend that it was in talks with JD.com over a possible sale of Argos, which Sainsbury's bought for £1.4 billion in 2016. The supermarket group said JD.com "communicated that it would now only be prepared to engage on a materially revised set of terms and commitments" and that, accordingly, Sainsbury's had "terminated discussions with JD.com."
Sainsbury's said Argos is the United Kingdom's second-largest general merchandise retailer, operating more than 1,100 collection points and running the third-most visited retail website in the country. The group reiterated its commitment to an internal turnaround strategy called "More Argos, more often," which it said is delivering progress by extending product range, enhancing digital capabilities and improving relevance to customers.
The talks with JD.com would have represented a significant step in the Chinese company's international expansion. JD.com, one of Asia's largest online retailers, serves roughly 600 million annual shoppers, reports about £120 billion in turnover and employs around 700,000 people. Its founder and chairman, Richard Qiangdong Liu, is among China's wealthiest entrepreneurs.
Sainsbury's said Argos traded 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 had been boosted by clearance activity. The group added that it continues to expect to deliver a retail underlying operating profit of around £1 billion and retail free cash flow of more than £500 million for the 2025-26 financial year.
Falling sales at Argos previously weighed on Sainsbury's performance, a key reason for the original 2016 acquisition aimed at competing with large online rivals such as Amazon. Since the takeover, hundreds of standalone Argos outlets were closed and integrated into Sainsbury's supermarkets to offer customer collection alongside grocery shopping.
Sainsbury's shares rose about 3.1 percent to 316.8 pence in early trading on Monday following the announcement. The group provided no further details on the specific revised terms JD.com had sought or on whether it will pursue alternative disposal options for Argos.
The company said it remains focused on executing its "Next Level" strategy and delivering what it described as the strongest and most successful future for Argos customers and colleagues. JD.com has continued to pursue global expansion, but Sainsbury's statement marks a clear pause in negotiations between the two retailers.
The termination ends a short-lived period of confirmed talks announced by Sainsbury's at the weekend; the group did not disclose the length of the negotiations prior to confirmation. Market attention is likely to remain on Sainsbury's broader turnaround efforts and whether it will explore other strategic options for Argos in the months ahead.