Asda Told To Sell 47 Netto Outlets As Part Of Takeover Deal

Asda has been ordered to offload a quarter of Netto’s UK stores in order to receive the green light for its £778 million acquisition of the discount grocer .
The Office of Fair Trading (OFT) said on Thursday that Asda needed to sell a larger-than-expected 47 of the 194 newly-acquired stores to address local competition concerns raised by the company’s proposed takeover.
Amelia Fletcher, the OFT’s senior director of mergers, said: “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.”
“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, the UK’s second-largest supermarket chain, said the OFT requirement was at the higher end of its expectations, but added it was confident of finding buyers and converting the remaining stores to the Asda brand by late summer 2011, as planned.
However, the first store conversions will now take place in the first quarter of 2011 rather than before Christmas .
Asda said it expects the takeover deal to create around 1,000 jobs and has also pledged to take on the “majority” of staff at two Netto distribution centres and a store service centre.
Netto, currently owned by Danish group Dansk Supermarked, has operated in the UK since 1990 and currently employs around 3,500 staff.