UK supermarket chain Asda to buy Netto Foodstores for $1.12 billion
27 May 2010
Asda Group, a UK supermarket chain owned by Wal-Mart, the world's largest retailer is buying the 193 discount stores of Netto Foodstores in the UK for $1.12 billion.
Netto Foodstores, owned by Danish chain Dansk Supermarked AS, which itself is 68-per cent owned by Danish business conglomerate A.P. Moller Maersk AS, was established in the UK in 1990 and operates 193 stores at an average area of 8,000sq ft each store.
Dansk Supermarked is the market leader in Denmark and has more than 1,000 Netto stores in Germany, Poland and Sweden including Denmark. Based in Højbjerg, Denmark, its employs 43,000 people and had revenues of more than $18 billion in 2009.
Asda became a subsidiary of Wal-Mart, when the US-based retail giant acquired it for $ $10.8 billion in 1999. It is the second largest chain in the UK after Tesco.
Asda will convert Netto's UK locations into Asda stores and integrate them into its new supermarkets division for units smaller than 25,000sq ft, but said that all Netto stores in the UK will continue operations under existing management until it receives approval of the deal from the regulator.
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,'' he added.
''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,'' said managing director of Netto, Claus Juel-Jensen.
