The deal marks an ambitious attempt to reshape the United Kingdom retail market, in which the traditional big four retailers - Tesco, Sainsbury's, Asda and Morrisons - have come under pressure from German discount chains Lidl and Aldi in food, and from homegrown rivals along with internet retailers such as Amazon in general merchandise.
"This is a transformational opportunity to create a new force in United Kingdom retail, which will be more competitive and give customers more of what they want now and in the future", said Mr Coupe.
The chief executive of Sainsbury's was filmed singing "We're in the Money" hours after announcing that the supermarket he runs would buy rival Asda, boosting his company's value by 860 million pounds ($1.18 billion).
Britain's Competition and Markets Authority said it will "likely" assess whether the deal could reduce competition and choice for shoppers.
The CEO of Sainsbury's has apologised after he was caught on camera singing "We're in the money" following the Asda merger announcement. "It was an unfortunate choice of song, from the musical 42nd Street which I saw a year ago", he said in a statement emailed by Sainsbury's.
The company's statement earlier Monday said: "The retail sector is going through significant and rapid change, as customer shopping habits continue to evolve".
The combined business would have total revenues of £51 billion.
Judith McKenna, president and chief executive officer of Walmart International, said: "This proposed merger represents a unique and bold opportunity, consistent with our strategy of looking for new ways to drive international growth". They aim to lower retail prices as much as 10 percent as a result of the deal.
The move underscores the intense competition in Britain's grocery market as discounters take market share from traditional chains such as Sainsbury's and Tesco.
"The transaction will, however, attract regulatory scrutiny, given that the merged companies will become the largest grocery retailer in the United Kingdom".
In March, Tesco completed the purchase of wholesaler Booker - Britain's biggest cash-and-carry operator - for £3.7 billion.
J Sainsbury plc, the chain's corporate name, says Walmart will receive £4.3 billion worth of Sainsbury's stock and £2.98 billion in cash.