New Delhi, Delhi, India

Sainsbury's, Britain's second largest supermarket, and Walmart, the world's biggest retailer, are in advanced talks about a tie-up that would create ‎a more powerful rival to UK market leader Tesco, Sky News reported on Saturday.

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Sky News said the two companies are in negotiations about combining Walmart's Asda business in the UK with Sainsbury's in a 10 billion pound ($13.79 billion) deal.

The companies have held preliminary discussions and could announce an agreement in the coming weeks, said the people, who asked not to be identified because deliberations are private. No final agreement has been reached and talks could still fall apart, they said.

A combination of Sainsbury, the UK’s second-largest grocer, with No. 3 Asda would push the combined company past Tesco Plc. Each company has just under 16 percent of the UK’s grocery business, according to Kantar Worldpanel, so a combined entity would have a nearly one-third share, compared with Tesco’s 28 per cent.

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It said an announcement could be made as early as Monday, or even sooner if the two sides are forced to accelerate their public disclosures.

Walmart acquired Asda for 6.7 billion pounds ($6.7 billion) in 1999.