Asda seals deal to buy Netto Foodstores

Asda expects to finalise the transaction after approval from the Office of Fair Trading later this summer.

Asda also expects 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 to operate as usual under existing management.

Netto was established in the UK in 1990 and operates 193 stores. It is the market leader in Denmark and among the fastest growing discounters in Germany, Poland and Sweden.

Andy Clarke, Asda's president and chief executive 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."

Claus Juel-Jensen, the managing director of Netto, said that management and staff should be proud of Netto's success.

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."

Supermarket share figures from Kantar Worldpanel this week revealed Netto had a 0.7% share of the grocery sector, but the discounters have seen previous stellar growth levels grind to a halt since the end of the recession.