2nd Aug 2005 15:00
Office of Fair Trading02 August 2005 Acquisition by Wm Morrison PLC of Safeway plc: Bury Road, Bolton The undertakings given by Wm Morrison PLC (Morrisons) to the Secretary of Statefor Trade and Industry on 8 December 2003 (the Undertakings)(1), requireMorrisons to divest certain stores to purchasers approved by the OFT to addressthe local adverse effects identified by the Competition Commission (CC). One of the one-stop stores that Morrisons is required to divest under theUndertakings is the store at Bury Road, Bolton (the Bolton store). TheUndertakings require Morrisons to sell the store to a purchaser approved by theOFT pursuant to paragraph 8.1 of the Undertakings. Where no such approvedpurchaser has bid at or above open market value for the store, the OFT mayrequire or direct that Morrisons do any of the things set out in paragraph 11.1of the Undertakings. Under this paragraph, the OFT has discretion to directthat Morrisons divest one or more of the one-stop stores to a purchaser whosatisfies the OFT that it intends to operate the store or stores in questionwholly or partially as grocery stores. Morrisons has sought bids for the Bolton store from a wide range of groceryoperators. This included all of the eligible major grocery operators, but nooffers were received from these parties. Morrisons has received an offer for the Bolton store from Netto Foodstores Ltd(Netto). Netto was not one of the grocery operators identified by the CC as an"effective competitor" in relation to one-stop stores. However, in light of thefact that that none of the eligible effective competitors has made an offer forthe Bolton store, a sale to Netto would go some way to mitigating the adversecompetition effects identified by the CC. Having consulted with Morrisons, the OFT is minded to direct that Morrisons maydivest the Bolton store to Netto, on the basis that Netto will operate the storewholly or partially as a grocery store. However, before making such adirection, interested parties are invited to make their views known. The OFT is also considering whether the transaction with Netto, if carried intoeffect, will result in the creation of a relevant merger situation under themerger provisions of the Enterprise Act 2002. Should it be found to be arelevant merger situation, the OFT will further consider whether the creation ofthat situation may be expected to result in a substantial lessening ofcompetition within any market or markets in the United Kingdom for goods orservices that warrants reference to the Competition Commission for investigationand report. Representations should be made in writing to the Office of Fair Trading by 5pmon 16 August 2005 and be addressed to: Darrell Channing Mergers BranchOffice of Fair TradingFleetbank House2-6 Salisbury SquareLondonEC4Y 8JXTelephone: 020 7211 8108Email: [email protected] -------------------------- (1) The Morrisons undertakings are available on the OFT's website at http://www.oft.gov.uk/Business/Mergers+FTA/Advice/Advice+on+post+reference+undertakings/Safeway2.htm This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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