Trade and Industry Secretary Patricia Hewitt today announced that she has accepted undertakings from Asda Group Limited, Wm Morrison Supermarkets plc, J Sainsbury plc and Tesco plc in relation to their proposed acquisitions of Safeway plc.
The undertakings accepted from Morrisons require them to sell stores in areas where local competition concerns would arise as a result of the acquisition. The undertakings accepted from Asda, Sainsbury's and Tesco require them not to acquire Safeway, or any part of Safeway whose acquisition may in the view of OFT give rise to the adverse effects specified in the Competition Commission (CC) report.
The parties have signed the undertakings.
The acceptance of these undertakings means that Morrisons is now free to make an offer for Safeway, should it choose to. Asda, Sainsbury's and Tesco are now in a position to bid for some of the stores Morrisons have undertaken to divest as a condition of buying Safeway, and to seek consent from the Office of Fair Trading to acquire any other collection of Safeway assets.
This follows the Competition Commission report of October 26 2003, which found that all four proposed acquisitions may be expected to operate against the public interest.
Hewitt said: "The Office of Fair Trading has advised me that they have obtained the undertakings which I have asked them to seek from Asda, Morrisons, Sainsbury's and Tesco. I believe they satisfactorily address the concerns identified by the Competition Commission in its report, and have therefore decided to accept the undertakings offered."
* Copies of the report "Safeway plc and Asda Group Limited (owned by Wal- Mart Stores Inc); Wm Morrison Supermarkets PLC; J Sainsbury plc; and Tesco plc - A report on the mergers in contemplation" (Cm 5950) are available from The Stationery Office, price £46.70. The report is also available on the CC website: http://www.competition-commission.org.uk
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