STAFF at Sainsbury's and Asda have been assured their jobs are not at risk, following the announcement the companies have agreed terms for a £12 billion merger.

There are five Sainsbury's stores on the Isle of Wight, with the largest at Newport which underwent an expansion in 2012, and others at Cowes, Ryde, Sandown and Freshwater.

Walmart-owned Asda only arrived on the Island last year, opening in August at the remodelled St Georges area of Newport.

The merge will aim to generate £500 million in cost savings but Sainsbury's insisted there are no planned store closures, with both brands to operate side by side.

The combined supermarket expects to lower prices by around 10 per cent on products customers buy regularly.

Sainsbury's chairman David Tyler 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."

If it goes ahead, the merged companies will have a bigger share of the market than Tesco. However, the merger still has to be approved by the Competition and Markets Authority (CMA).

Unions have raised fears over the prospects for jobs, and demanded sit down meetings with senior bosses at both Sainsbury's and Asda.