The two companies announced early Monday that they willjoin forces to become the U.K.'s largest grocer, surpassing Tesco. The deal, worth about £7.3 billion ($10 billion), will keep both the Sainsbury's and Asda brands.
The combined business will generate at least £500 million ($688.62 million) in cost savings and lead to a reduction in prices of about 10 percent, the supermarkets said.
Peter Toogood, chief investment officer at Embark Group, told CNBC's "Squawk Box Europe" that the deal wasn't "the most sophisticated."
He described the merger news as "the Amazon protection program continues."
Sainsbury's and Asda have struggled with their sales growths, which have weighed on their ability to obtain cheaper deals with suppliers. Both competition from online and from discounters has put pressure on the grocery market.
"It's just putting two companies together that aren't growing. So, again, it will help the margin story, but they have also just told you they are going to whack prices down by 10 percent… Tesco…, if anything, is holding their price," Toogood added.