UK Trade Secretary Patricia Hewitt has announced a clarification of the position on any asset disposals in a takeover of Safeway.
On 26 September, Hewitt announced that she had asked the Office of Fair Trading to obtain undertakings from UK retailers Asda, Sainsbury’s and Tesco not to acquire Safeway or “any part of” Safeway, following the Competition Commission’s (CC) report into the proposed acquisitions of Safeway.
Following the first round of consultation between OFT and the retailers, Hewitt has announced that it has become clear that there is some speculation over the exact scope of the prohibition undertakings required. She has concluded that she should make a further comment on what, in the light of the CC’s report, she considers this to be in order to minimise market uncertainty.
Hewitt said that she intends to indicate to the OFT that the ban on acquiring “any part of” Safeway should exclude transactions to which the OFT has given its prior written consent and that the ban should include Safeway assets, such as stores and distribution depots, that would cause competition concerns were they to be taken over.