UK: Wm Morrison agrees £3bn bid for Safeway
UK supermarket group Wm Morrison has agreed a new £3bn (US$5.2bn) bid for rival retailer Safeway.
Morrison, which is the UK's fifth-largest grocery retailer, offered 283 pence per share, including 60 pence in cash, for its larger rival, fourth-placed Safeway, reported Reuters.
Last week, Wal-Mart's Asda was reported to have made an indicative offer of around £2bn for 70 Safeway stores, in a move believed by some analysts to be an attempt to hamper Morrison's takeover plans.
But Yorkshire-based Morrison said it was confident that any such move by Asda would be blocked by competition authorities. Morrison added that it was optimistic of completing the deal by the end of the first quarter of 2004.
"Putting Morrison and Safeway together will create a powerful national retailer able to challenge the other three majors," Morrison's executive chairman, Ken Morrison, was quoted by Reuters as saying.
According to the latest industry data, a combined Morrison/Safeway would have a market share of 15.6%, compared with the 16.0% share currently held by third-placed supermarket group, J Sainsbury. Asda has a 16.7% market share, while leader Tesco has 26.8% of the market.
Morrison will have to sell 52 Safeway stores if its takeover is successful, in order to satisfy competition regulators. Once those stores are divested, the combined retailer would have 552 stores and sales of around £13bn.
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