The Competition and Markets Authority has said the merger is "likely to be subject to review".

It explains there is typically a two-stage process with phase one running for up to 40 days. In a phase one investigation, it will typically looking at whether the deal could reduce competition and choice for shoppers.

After this first phase, the CMA says the merger could be cleared or, if a potential reduction in competition is identified, it would be referred for an in-depth, Phase 2 investigation lasting up to 24 weeks.

The CMA notes firms can request to "fast track" tthe referral of merger cases to Phase 2, something Sainsbury's has said it plans to do.

The CMA says a phase 2 investigation can result in a merger being cleared, prohibited, or allowed to proceed subject to ‘remedies’ such as the sale of parts of one or both businesses.

Image source, Getty Images

Away from Sainsbury's for a second, here's the latest Asian market update.

In Australia, the benchmark S&P/ASX 200 ended Monday's session up 0.49% to 5,982.7 boosted by some of the country's biggest lenders.

Despite further resignations related to a government-led inquiry into Australia's financial sector, National Australia Bank gained 1.26% and Westpac finished up 1.2%.

In China, Hong Kong's Hang Seng index was up 1.7% in afternoon trade, while the Shanghai Composite was up 0.23%.

Japan's benchmark Nikkei 225 was closed for a public holiday.

Sainsbury's boss Mike Coupe denies there will be job losses at the head offices.

"We stand by what we said. There will be no store closures and if we are successful we will employ more, not less people - both businesses will be run as they are today," he says.

That means that Asda's head office will continue to be run from Leeds and Sainsbury's from its Holborn head office in central London, according to Mr Coupe.

Sainsbury's Mike Coupe's call with the media has just ended.

His last points were that they have asked the Competition and Markets Authority (CMA) to fast-track the deal to a phase two in depth probe.

"We believe the outcome of the CMA will be to keep all of the stores trading."

He pointed out that Asda has a strong presence in the north of England, while Sainsbury's strength is in the south.

"The deal brings scale in clothing and general merchandise," he said, confirming that Argos stores will be put inside Asda supermarkets.

He also confirmed that the deal has the blessing of the Qatar Investment Authority, Sainsbury's largest shareholder.

Image source, AFP

Amid all this merger talk, Sainsbury's brought forward its full-year results which it had been expected to announce on Wednesday.

Like-for-like sales, which does not include trade from new shops opened in the 12 months to 10 March, rose by 1.3%.Total revenues grew by 9% at £31.7bn.

However, pre-tax profits fell by 18.7% to £409m.

Sainsbury's said: "Economic conditions became more challenging for UK consumers during the last year. The devaluation of sterling and higher commodity prices fed through to food and non-food prices from the start of our financial year, with the consequence that wage growth fell behind inflation for the first time in over three years."

It said that while higher inflation benefited food retail market growth: "The impact on disposable income of higher inflation saw non-food retail sales growth weaken over the course of the year.

"Combined with the impacts of wage inflation, online channel shift and other structural pressures on traditional non-food retailers, this is accelerating the process of consolidation in the non-food market."

On an underlying basis, pre-tax profits rose by 1.4% to £589m.

Image source, Getty Images

Of the £500m in synergies, the two supermarkets have said they will save from joining forces, Sainsbury's chief executive Mike Coupe says that £350m of these will be found in buying synergies - 100 suppliers account for 80% of combined book, he says.

But he says there will also be "significant savings in the things we buy but we don't sell, for example electricity, advertising and IT".

BBC Radio 5 live

Image source, PA

Within all this merger talk, what does a Sainsbury's/Asda merger mean for Argos?

Remember that Sainsbury's bought Home Retail Group, the owner of Argos, in 2016.

Sainsbury's has said that savings would come through "opening Argos shops in Asda stores, the firms said.

Does that mean Argos stores will close like they have done in Sainsbury's?

Sainsbury's chief executive Mike Coupe tell Radio 5 Live: "We now have over 1,000 Argos stores and when we bought the business there were around 760 so actually we've increased the amount of employment in our Argos business, not reduced it.

"Whilst there have been some stores that have closed, those [Argos] colleagues have transferred into the Sainsbury's stores that have opened and we intend to do exactly the same thing within Asda stores should this transaction go through."

Image source, Getty Images

The FTSE 100 is trading up 30.22 points or 0.40% at 7,532.43.

Sainsbury's is leading the risers on the blue chip index, with its share price now up 17% at 315.85p as investors reacted to its proposed merger with Asda after the deal first emerged on Saturday.

However, rival supermarkets saw their shares slide. Tesco is the biggest faller, with its stock dropping by 3.4% to 229.8p while Morrison's share price dropped by 1.5% to 236.25p.

A positive trading update from advertising giant WPP sent its share price up by 7.49% to £12.34.

The FTSE 250 is ahead 82.48 points, or 0.41%, at 20,354.11.

Image source, Getty Images

Retail analyst Nick Bubb says today's merger deal between Sainsbury's and Asda would have been "unthinkable a couple of years ago".

"The bizarre decision last year by the CMA to give the Tesco/Booker deal the go-ahead without any divestments inevitably opened the path to more sector consolidation," he says.

As a result he thinks "there’s a pretty good chance the CMA will allow the merger to proceed in the end.

If the deal does go through, he says a successful Sainsbury’s/Asda merger would be bad for Morrisons long term, but says in the short term, it would be able to grow by buying the surplus stores from Sainsbury’s/Asda.

He says the deal is also bad news for Tesco, but says it's only got itself to blame.

"Arguably it’s their fault that Sainsbury’s was emboldened by the CMA approval of the Booker deal to come up with this Asda idea," he says.

BBC Radio 5 live

Image source, Getty Images

Sainsbury's chief executive Mike Coupe says that by merging with Asda it is aiming to lower prices on "everyday essentials" by around 10%.

But is that 10% below Asda prices or the more historically expensive Sainsbury's?

He tells Radio 5 Live: "Both businesses have a programme to invest in price, it's a fiercely competitive market and of course that is great news for customers so this 10% is above and beyond what both businesses are currently planning to do."

Image source, Getty Images

Mike Coupe is now talking to the press on a media call. He says in his 30 years in retail he has never seen the industry change so fast.

He claims the tie up with Asda will be "highly complementary" and he confirms that currently it plans no store closures.

He says it will return £500m in savings to shareholders and that both businesses have plans to invest in prices.

He denies suppliers will be hurt by the merger: "The reality is about 85% of the business that we do come from around 100 suppliers and those suppliers are very large multinational businesses," he adds.

The BBC's business editor Simon Jack has now penned this thoughts on the Sainsbury's and Asda deal below:

Mike Coupe has promised there will be no store closures and no job losses IN STORES.

Both comments need unpacking. A commitment not to close any of the combined 2,800 stores the group will have in a fast changing retail environment seems a very bold claim.

Even if we take him at face value, the no store closure promise still leaves buying functions, logistics, warehousing and management duplication vulnerable to the cuts that are inevitable if the "synergies" of this merger are to be realised.

The buying power of the combined group could result in lower prices for consumers but the Federation for Small Business fear those savings may come at the expense of suppliers. Financial markets gave the deal a thumbs up today as shares leapt 20%.

The competition authorities may not give it such an unqualified hooray.

Today Programme
BBC Radio 4

Image source, Getty Images

The BBC's business editor Simon Jack tells Today the Sainsbury's and Asda tie-up is a "defensive move".

"Everyone in the market is trying to Amazon-proof their business," he says.

Mr Jack also believes the regulatory regime has shifted, noting Tesco was allowed to buy wholesaler Booker, Sainsbury's was allowed to buy Argos and Morrisons now acts as a wholesaler to Amazon.

"We're seeing a rapid consolidation in the market. This deal would have been unthinkable even five years ago which shows how much has changed."

But Mr Jack notes that if the deal does get the regulatory green light, the real issue will be for shoppers.

"If it's the same person buying the beans for both of these stores, [they will want to know] am I going to get exactly the same price? Will it blur the brands in these stores," he says.

The stock market has given its verdict on Sainsbury's plan to merge with Asda and it is a resounding thumbs up - Sainsbury's shares soared by 19.79% in the opening minutes of trading to 323.2p.

Today Programme
BBC Radio 4

For Asda or Sainsbury's employees worried about their pensions, chief executive Mike Coupe says fear not.

"Walmart will retain responsibility for the Asda pension, he tells the Today programme. "It is the world's largest retailer so that's good news for Asda pension holders and of course Sainsbury's pension holders will be backed by that larger company as well."

Image source, Getty Images

Away from Sainsbury's for a minute, construction and support services firm Interserve has reported its results for 2017 this morning - which it describes as a "difficult year".

The firm admits that its financial performance was "extremely poor" last year, and reported a £244.4m pre-tax loss, compared with a loss of £94.1m for 2016.

Revenue rose marginally to £3.25bn from £3.24bn.T

The firm - which recently agreed a refinancing with its lenders - said it was the deal was "a major step in securing a firm financial platform to underpin the Group's future".

"Of course there is much still to do," it admits.

Today Programme
BBC Radio 4

Labour's shadow business secretary Rebecca Long-Bailey says she is concerned over the proposed Sainsbury's and Asda tie-up.

She says the deal contains "significant risks" for jobs and is calling for the deal to be urgently referred to the Competition and Markets Authority.

But she also warns there's a huge risk to suppliers.

The combined group "will have immense purchasing power, giving them an opportunity to bargain very hard with suppliers," she warns.

Today Programme
BBC Radio 4

Image source, Getty Images

Sainsbury's chief executive Mike Coupe says that the merger will create a "dynamic new player" in the UK grocery market.

It also means Sainsbury's will have the buying power of Walmart, the US owner of Asda, behind the combined group.

He says: "We think this is great news for UK customers because ultimately that's what we're here to do, to deliver to our customers week in, week out.

"It will enable us to bring prices down, to improve quality, to improve product ranges and to bring the power of Walmart in the form of the buying of general merchandise and their systems and investments to the UK."