Asda says it has moved a step closer to buying discount chain Netto’s UK stores after it found buyers for all sites it is required to sell by the Office of Fair Trading (OFT).
Asda has agreed to sell 16 stores to rival supermarket Morrisons for £28.1 million, three to Iceland and 20 to independent chain Haldanes, removing a major obstacle to the acquisition.
Asda, which is owned by American retail giant Walmart, agreed a £778 million deal to buy Danish discount chain Netto’s 194 UK stores in May.
But the OFT, which is still consulting on whether to allow the deal, said it would need to sell stores in 47 locations for competition reasons. Of those stores, 25 needed to be sold upfront and the rest would need to be sold after the deal.
Asda said it had agreed to sell all 25 of the stores it would need to sell in advance, plus 14 of those that would need to be sold afterwards. It is still looking for buyers for the remaining eight stores.
It said the news was a “major milestone in its purchase of Netto’s UK stores”.
If the deal is given the go-ahead, Asda will take over 147 of Netto’s stores, adding 1.2 million square feet to its retail space.
The acquisition will allow Asda, which typically runs large supermarkets in out of town locations, to greatly expand its portfolio of smaller stores. The retailer plans to increase the range in the stores from 1,800 lines to 10,000 lines and will double the amount of fresh food to allow a full weekly shop.
Asda chief financial officer Judith McKenna, who led the deal, said: “The good news for shoppers is that there’ll be no premium to shop in one of our smaller stores. We’ll charge the same low prices you’ll find in any of our stores.”
The OFT’s consultation about whether to allow the deal will end at 5pm on February 2.