Morrisons, the UK supermarket group which opened the bidding for rival chain Safeway, yesterday [Wednesday] delivered its official submission to the Office of Fair Trading.
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The group argues that a major league of four national food retailers will promote competition and offer consumers more choice. Sainsbury’s and Wal-Mart’s Asda have also expressed interested in buying Safeway. Were either to succeed, Morrisons argues that a superleague of just three players would be created. If Morrisons merges with Safeway, this would create a fourth serious player able to stimulate competition.
The Daily Telegraph quotes CEO Ken Morrison as saying: “We strongly believe that four national food retailers is better for competition than three. Morrisons and Safeway have little overlap,” he said. “Any other combination would be bad news for customers who would face the risk of less choice and higher prices.”
Meanwhile Morrison yesterday paid courtesy calls to a string of leading investors in his supermarket chain to persuade them of the sense in his bid for Safeway. Shares in Morrisons have fallen in the last week, with the effect that his all-paper bid for Safeway, initially valuing the company at £2.9bn, is now worth just £2.49bn.
The Office of Fair Trading said it would aim to evaluate bids for Safeway within 45 working days.
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