LONDON: Sainsbury’s, Britain’s second-largest grocer, held talks with smaller rival Morrisons about a possible merger earlier this year, according to media reports Monday.

The two companies discussed a potential multibillion-pound deal before Sainsbury’s walked away, the Financial Times reported, citing people familiar with the matter. The talks ran from November 2025 to February and are no longer active, the newspaper said.

People close to the situation did not rule out a resumption of negotiations in the future, the FT reported.

Spokespeople for Sainsbury’s and for Morrisons, which is owned by U.S. private equity firm Clayton, Dubilier & Rice, declined to comment on the report.

Morrisons’ owner would remain open to a tie-up with a competitor, Sky News reported, citing retail insiders.

The reports come as the two grocers show diverging sales trends. Sainsbury’s reported slower underlying sales growth in its most recent quarter, while Morrisons, the UK’s sixth-largest grocer, reported growth in quarterly sales.

Any large grocery merger could face scrutiny from regulators. In 2019, Britain’s competition regulator blocked Sainsbury’s proposed 7.3 billion pound ($9.7 billion) takeover of Asda.

Clayton, Dubilier & Rice won an auction to buy Morrisons for 7 billion pounds in 2021, beating a consortium led by Fortress Investment Group, which is owned by SoftBank.

Shares of Sainsbury’s were little changed Monday and are marginally lower so far this year.