Sainsbury’s drops Somerfield plans
Acquisition of store package abandoned
August 23 2003
Sainsbury’s has abandoned plans to acquire 171 stores from rival supermarket operator Somerfield following the referral of its plans the to the Competition Commission.
Sainsbury’s had originally been in talks over a possible acquisition of the stores from Springwater, the bid vehicle established by John Lovering and Bob Mackenzie. The sale by Springwater of the package of stores was planned to help cover the cost of the bid, while Sainsbury’s hoped to expand its Local c-store format.
That bid was rejected by Somerfield, but Sainsbury’s chose to seek regulatory approval in case another bidder came forward. Sainsbury’s, also one of the potential bidders for Safeway, said it will now not be pursuing the transaction and has asked the Secretary of State to set aside the Competition Commission reference.
Group chief executive Sir Peter Davis, said: “I was disappointed with the outcome of the regulatory process. However, given the current level of regulatory uncertainty in the food retail sector, we have decided not to pursue the transaction any further.”
