The Office of Fair Trading (OFT) has paved the way for Asda to finalise its agreement with Dansk Supermarked A/S to purchase its fully-owned subsidiary Netto Foodstores Limited. A day ago, OFT had asked Asda to sell 47 Netto shares.
Asda is confident that it can meet these obligations and expects to complete the conversion of the Netto stores by late summer 2011 as planned.
Asda’s president and chief executive Andy Clarke said, “OFT announcement paves the way for us to bring Asda to thousands of people in England and Wales and create a significant number of new jobs in an increasingly tough economy.”
When the deal completes, the key elements of the plan to transform Netto’s UK stores will be to give customers access to a significantly expanded range of products at the same low Asda prices available at its other stores.
After meeting the OFT’s requirement to sell stores, around 1,000 jobs will be created in the stores it converts to trade under the Asda Supermarket name. On average, there will be up to double the number of colleagues employed in a Netto converted to Asda. All existing Netto store colleagues in the acquired stores will be retained with the additional posts filled through a combination of new recruits and colleagues from existing Asda stores.
Asda’s chief financial officer Judith McKenna said, “We’ve already learned so much from Netto colleagues and I appreciate their hard work and commitment. I’m looking forward to continuing to work together to ensure we make the transition to Asda a success and putting into practice what we’ve learned. I continue to be excited at what we can achieve together.”
As a consequence of the new regulatory timetable, Asda is planning to open its first pilot conversions in the first quarter of 2011, rather than before Christmas. This is a pragmatic business decision allowing Asda and Netto to concentrate on trading in the busiest period of the year.
Asda has already begun discussions with prospective buyers and is confident that it can complete the sale of those stores.
In the interim, these stores will continue to trade under the Netto name with existing colleagues whose roles will be fully protected in the interim. Asda will work quickly to provide certainty to those colleagues in these stores as it arranges for a sale.
– IndiaRetailing Bureau
