Asda in £778m deal for Netto chain

SUPERMARKET chain Asda has revealed plans to buy the UK arm of discount retailer Netto in a move that will add 193 stores to its chain.

Asda, which is owned by US group Wal-Mart, has agreed a 778m deal to buy the stores, which it aims to convert to the Asda brand by next summer. The Leeds-based group hopes to complete the takeover later this summer, subject to regulatory approval.

The deal is an ambitious first step by new Asda chief Andy Clarke, who took over earlier this month.

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Asda, which owns 374 stores, is aiming to boost its portfolio of smaller stores. It said the Netto stores would be added to a new division set up for supermarkets smaller than 25,000 square feet.

Netto, owned by Danish group Dansk Supermarked, has its UK head office in South Elmsall, West Yorkshire. It employs 3,500 staff in the UK.

Supermarket share figures from Kantar Worldpanel this week revealed it had a 0.7 per cent share of the grocery sector.

The managing director of Netto, Claus Juel-Jensen, said: "We have substantial opportunities for growth in Scandinavia and northern Europe and believe the time has come to focus our efforts on our business in these countries."

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Asda president and chief executive Mr Clarke added: "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."

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