If the merger goes ahead between Sainbury's and Asda -Britain's second and third largest supermarket chains - the combined group would comprise 2,800 stores and would represent about 30 per cent of the United Kingdom grocery market, similar to Tesco's share.
Any proposed deal is likely to be closely scrutinized by the competition watchdog over concerns it would reduce competition and tighten the grip the four major supermarket chains - Tesco, Sainsbury's, Asda and Morrisons - on the United Kingdom grocery market.
The source described the planned deal - which would consolidate a brutally competitive United Kingdom food market while helping Walmart address its underperforming United Kingdom arm through greater buying power - as a "merger".
"The potential tie-up would see the combined business take Tesco head-on", he said.
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Pompeo, a former Army officer who was a Republican congressman, is regarded as a loyal supporter of U.S. In addition, Pompeo will have separate talks with the foreign ministers of Italy and Turkey.
Sheikh Abdullah bin Mohamed bin Saud al-Thani said the fund, with assets unofficially estimated at about $300 billion (€247 billion), did not need to sell foreign assets to raise cash, and indeed was about to announce "the deal of a lifetime".
Excluding one-offs, City consensus forecasts are for Sainsbury's to unveil a 1.5 per cent fall in profits to £572m - the fourth successive year of falling earnings.
The UK's second-largest retailer has confirmed plans to merge with its nearest rival Asda in a £15bn deal that will create a mega-grocer with sales of more than £50bn and 2,800 stores. Analysts reckon Asda was hurt the most by the rise of the discounters, which eroded its traditional price advantage.
In January, Walmart appointed Chief Operating Officer Judith McKenna to run its worldwide unit with a remit that included fixing its United Kingdom operations. One of the sources said he would stay at the combined group.
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Tesco last month moved to strengthen its grip on the United Kingdom food sector with the 4 billion-pound purchase of wholesaler Booker.
Asda stores would continue to trade under their own brand, separate from the more upmarket Sainsbury's, the sources said.
Before the deal can be given a green light, economists at the Competition and Markets Authority (CMA) are expected to spend months poring over a map of the combined group's store network.
Together they would have a share of 31.4 per cent, putting them ahead of current market leader Tesco which has a share of 27.6 per cent.
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However, the CMA's surprise unconditional waving through of Tesco's Booker deal may have changed the regulatory landscape.