Asda buys Netto for £778m
YORKSHIRE supermarket chain Asda today announced a deal to buy discount grocery group Netto.
The deal is worth £778m and will see the Leeds-based group, which is owned by US giant Wal-Mart, convert the 193 Netto stores in the UK to small Asda stores by next summer.
It has bought the UK Netto Foodstores operation from Danish group Dansk Supermarked and the move comes after it appointed Andy Clarke as chief executive and signalled its intention to move into the small grocery store sector to compete with Tesco and Marks & Spencer.
Dansk was advised by Yorkshire law firm Walker Morris led by partners Ian Gilbert and Andrew Moody, with the team including Vikki Hoyle and Mark Whitaker.
The transaction, which remains subject to regulatory 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 has its headquarters in South Elmsall, West Yorkshire, operates 193 stores at an average 8,000sq 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.”
Asda said it will employ up to twice as many colleagues to serve customers compared to a Netto in the same location.
Managing director of Netto, 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.”
