Asda Agrees to Purchase Netto Foodstores Limited from Dansk Supermarked A/S
The transaction, which remains subject to regulatory approval, will enable it to convert Netto’s UK locations into Asda stores and integrate them into its new supermarkets division for units smaller than 25,000sq ft.
28 May 2010 --- Asda has reached agreement with Dansk Supermarked A/S to purchase its fully owned subsidiary, Netto Foodstores Limited.
The transaction, which remains subject to regulatory approval, will enable it to convert Netto’s UK locations into Asda stores and integrate them into its new supermarkets division for units smaller than 25,000sq ft.
Asda expects to finalise the transaction after approval from the Office of Fair Trading later this summer and to complete the refurbishment of the Netto stores to trade under an Asda fascia by the middle of 2011. Until official approval is granted, all Netto stores in the UK will continue operations as usual under existing management.
Netto was established in the UK in 1990 and operates 193 stores at an average 8000sq ft. It is the market leader in Denmark and among the fastest growing discounters in Germany, Poland and Sweden.
Commenting on the agreement, Asda’s president and chief executive Andy Clarke said: “We very much look forward to welcoming Netto’s colleagues into our business and joining our team. Customers will benefit from low prices on a significantly broader range of quality products, complemented by the wide range of services we offer in all our smaller stores.
“The creation of new in-store jobs in a tough economy will also be a welcome boost in scores of communities across the UK.”
With the transformation in range, customers will be able to complete a full weekly shop. As a result Asda will employ up to twice as many colleagues to serve customers compared to a Netto in the same location.
Managing director of Netto, Mr Claus Juel-Jensen, said that management and staff should be proud of Netto’s success: “Netto has been profitable and was appointed ‘Discounter of the Year’ in 2009. As a major league player, Asda is the ideal purchaser of our UK business. We have substantial opportunities for growth in Scandinavia and Northern Europe and believe that the time has come to focus our efforts on the development of our business in these countries.”
Asda’s move to acquire all Netto’s UK stores is a key strategic building block in satisfying demand for the retailer in a much broader range of communities across the UK and underlines Asda’s commitment to its smaller stores division.
