RETAIL analysts are expecting jobs to be lost after the merger between supermarket giants Sainsbury’s and Asda in a £12bn deal.

The duo - the UK’s number two and three supermarkets - have 2,800 Sainsbury’s, Asda and Argos stores across the UK.

But experts are predicting that towns with an Asda and Sainsbury’s store will see a store close if the merger is to get past the Competition and Markets Authority.

In East Lancashire, Burnley and Colne have both a Sainsbury’s and an Asda.

The CMA said that the merger is “likely to be subject to review”.

Patrick O’Brien, Global Data retail research director, said: “While there are no plans to close any stores at this time, regulators will be looking to see how many Asda stores are in close proximity to Sainsbury’s stores.

“Seventy-five Asda stores have a Sainsbury’s (excluding Locals) in the same sector.

“We think these 75 stores would be the absolute minimum that the CMA will want disposed of.”

Sainsbury’s has stores in Darwen, Burnley, Colne and Clitheroe with Asda having supermarkets in Accrington, Burnley, Blackburn, Rawtenstall and Colne.

The move aims to generate £500million in cost savings but Sainsbury’s insisted there are no planned store closures as part of the merger, with both brands to operate side by side.

David Tyler, chairman of Sainsbury’s, said: “We believe that the combination of Sainsbury’s and Asda will create substantial value for our shareholders and will be excellent news for our customers and our colleagues.”

“As one of the largest employers in the country, the combined business will become an even greater contributor to the British economy.”

“The proposal will bring together two of the most experienced and talented management teams in retail at a time when the industry is undergoing rapid change.

“We welcome Walmart as a significant shareholder and look forward to working closely with them.”

Roger Burnley, chief executive officer of Asda, said: “The combination of Asda and Sainsbury’s into a single retailing group will be great news for Asda customers, allowing us to deliver even lower prices in store and even greater choice.”

“Asda will continue to be Asda, but by coming together with Sainsbury’s, supported by Walmart, we can further accelerate our existing strategy and make our offer even more compelling and competitive.

“From my six years with Asda and 10 years with Sainsbury’s, I know first hand that both organisations are fortunate to employ some of the most talented and customer-focused colleagues in this market and I am excited by the opportunity of the two coming together.”

Tim Roache, general secretary of the GMB union, said: “It remains to be seen if this ‘supermarket sweepstake’ is the real deal or a bargain-basement ready meal.“Hundreds of thousands of workers stand to be affected, and all know such announcements tend to be followed by management speak like ‘rationalisation’ in the name of ‘efficiency’.”

“What that usually means is job losses or cuts to pay, terms and conditions which would be wholly unacceptable.”

Stockbrokers Peel Hunt’s head of research Charles Hall said: “While the Sainsbury’s/Asda merger might look good on paper, we see no chance of it getting through the CMA without a major dismemberment of the combined business.”

“This will only be possible if there is an acquirer for a significant proportion of the business, and Morrisons is the only acquirer that makes sense. This would take the big four down to three, which looks highly unlikely to get through the CMA.”