Home Retail Group has confirmed it is backing Sainsbury's £1.4bn proposal to take over Argos.
The deal comes after months of speculation and a dramatic, game-changing bid from Steinhoff, only for the South African retailer to drop out at the last minute. Sainsbury's will pay 55p in cash and 0.321 of Sainbury's shares per each HRG share, which values HRG at £1.2bn.

HRG shareholders will received 25p a share from the sale of Homebase and 2.8p a share in place of a final dividend for the financial year which ended on February 27.

Sainsbury's expects the deal to complete during the third quarter of this year.

Sainsbury's chairman David Tyler said: "We are very pleased the Board of Home Retail Group plc has recommended our offer for the acquisition of its business to its shareholders. The combined business will offer a multi-product, multi-channel proposition, with fast delivery networks, which we believe will be very attractive to customers and which will create value to both sets of shareholders.

"The acquisition will now be carried out through a scheme of arrangement, helping to facilitate a speedy completion which is in the interests of the customers, colleagues and shareholders of both businesses. Our next steps are to focus jointly on ensuring we obtain the necessary regulatory clearances and that we are well prepared for the future integration of these two great retailers."

Home Retail Group chairman John Coombe added: "Argos is both an icon of the British High Street and also a leader in the digital transformation of UK retailing. We are pleased that Sainsbury's has recognised our progress and our potential with its recommended acquisition of Home Retail Group plc.

"This is a testament to the vision and hard work of management and all our colleagues. We thank them for all they have done for Home Retail Group plc and Argos in particular and wish them well for the future."