Asda will have to sell off almost 50 Netto stores to gain regulatory approval for its takeover of the Danish discounter’s UK business.
The supermarket said it had begun talks with possible buyers for 47 stores under the Netto banner – a figure it admitted was “at the high end of its expectations”.
Asda has delayed the first phase of converting the acquired stores to its own fascia until the first quarter of next year, having originally planned to start the changes before Christmas.
But the group insisted all former Netto stores would be under the Asda banner by the end of next summer.
“Although Asda and Netto offer somewhat different propositions for customers, the evidence from our investigation indicated that Asda did provide a significant competitive constraint on Netto in a number of local areas where they overlapped,” said Amelia Fletcher, senior director of mergers for the Office of Fair Trading.
“The OFT is confident that, if agreed, this package of remedies will safeguard competition in 47 such areas, to the benefit of local shoppers, while allowing the remaining store purchases to go ahead.”
Asda chief executive Andy Clarke was confident buyers would be found for the 47 stores.
“Today’s OFT announcement paves the way for us to bring Asda to thousands of people in England and Wales and create a significant number of new jobs in an increasingly tough economy,” he said.
Chief financial officer Judith McKenna added: “We’ve already learned so much from Netto colleagues and I appreciate their hard work and commitment. I’m looking forward to continuing to work together to ensure we make the transition to Asda a success and putting into practice what we’ve learned.”
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Is Netto a good catch for Asda and what’s the plan? (analysis; 5 June 2010)
Asda in shock swoop for discounter Netto (27 May 2010)
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