Morrisons offer for Safeway lapses
Company to review its option after disappointing OFT ruling
March 20 2003
Supermarket operator Morrisons has formally lapsed its all-share offer for rival Safeway after the Office of Fair Trading ruled that it should face a full inquiry along with Tesco, Asda and Sainsbury’s.
Morrisons said it was ‘disappointed’ that the OFT “found difficulty in identifying and addressing the local areas of overlap between Morrisons and Safeway.” Morrisons had argued strongly that there was little overlap between the two companies’ stores, and offered to sell stores where necessary.
The offer has now lapsed In accordance with the terms set out when it was tabled in January. Chairman Sir Kenneth Morrison said: “The statement is very disappointing as we believe our offer for Safeway would have enhanced competition and created a strong fourth national food retailer.
“Morrisons is the only combination with Safeway which can generate strong competition at a national level securing a better deal for customers and fair treatment of suppliers.”
Sainsbury’s said it would wait for the outcome of the inquiry. Sir Peter Davis, group chief executive, said: “Naturally I am disappointed that the regulatory process is to be extended. However, we will cooperate fully with the Competition Commission and look forward to a satisfactory conclusion. We believe a combination with Safeway would offer more customers greater choice and a superior food proposition.”
Safeway said it “remains fully committed to achieving an outcome which is in the best interests of shareholders, the business and our employees.”
