Disadvantages of HRG Sainsbury's takeover

Disadvantages to Sainsbury's stores Whilst Home retail had only had costs of £19m, Sainsbury's had costs of over £30m to put the deal together With the final price of 171.5p per Home Retail Group share, a 75% increase to the price of the shares prior to the takeover, Sainsbury's bought the retailer at a very pricey 19 times forward earnings.  Sainsbury had noticed a rapid increase in sales of non-food goods at these stores noticing the large opportunity for high revenues by placing temporary Argos outlets to encourage footfall in the short term, but leaving the business models questionable Employees; It was warned that up to 600 head office jobs were at risk in its £1.4bn takeover Sainsbury’s said that 200 to 300 store jobs would be eliminated by plans to relocate Argos’s high street branches to its supermarkets

Customers and Competition Sainsbury who noticed themselves losing market share to low-price rivals Aldi and Lidl, and Argos, through the price wars of these firms and the likes of other e-commerce stores such as Amazon Sainsbury's OP margins were seen to fall to 2.71% The Argos and Sainsbury's chain target two very different audiences; wealthier customers and low-price sector customers. The takeover results in Sainsbury's potentially having to turn core customers away and lose their competitive advantage by bringing in the lower-end Argos brand Why would combining two struggling retailers somehow create one thriving one?