By Max Clarke
Supermarket giant ASDA is preparing for the acquisition of all 194 branches of Danish low cost retailer Netto's.
The merger proposal has been accepted by the Office for Fair Trading and will therefore not be referred to the Competition Commission, however in ordero address local competition concerns, Asda will be obliged to sell off Netto stores in 47 local areas.
Asda offered to find 'upfront' buyers for the stores in 25 of these areas, where the evidence suggested finding suitable buyers might be difficult. Asda has done this successfully, within the OFT's required timescales. The agreed purchasers of those 25 stores are Wm Morrison Supermarket plc, Iceland Foods Limited and the Haldanes Group. The Haldanes stores will trade under Haldanes's new 'Ugo' brand.
The next step is for Asda to divest the stores in the remaining 22 areas.
The acceptance of the undertakings follows a public consultation on them, including the identity of the 'upfront' buyers, following which the OFT remains confident that the undertakings address its competition concerns in a clear cut manner.
Amelia Fletcher, OFT Chief Economist and Decision Maker in this case, said:
'We required these divestments to ensure that shoppers continue to benefit from competition in their local areas. Where upfront buyers were required, we carefully assessed the financial position and commitment of all prospective purchasers, before accepting the undertakings.'