Safeway merger decision delayed
The Competition Commission has successfully applied for a six-day extension for its report into the proposed takeover of the supermarket chain Safeway’s
The commission was expected to deliver its verdict today on which of the four potential buyers for Safeway can be allowed to buy the group.
It will now pass its verdict to Patricia Hewitt, the Secretary of State for Trade and Industry, by Monday 18th August. Ms Hewitt will then spend six weeks reviewing the report before making her decision known.
Competition Commission Chairman Sir Derek Morris commented, ‘One of the parties requested a further meeting last week. The Commission needed to assess the matters discussed and give the other main parties a chance to comment.
“These matters needed to be addressed before completing our report to the Secretary of State. The CC worked through the weekend to achieve this in time for the report to be produced by today but this proved impossible. We now hope to submit it by Friday 15 August but have requested an extension to Monday 18 August 2003 to allow another weekend for any last minute considerations that may slow us down.’
It is widely expected that the bids from Tesco, Asda’s parent company Wal-Mart and Sainsbury’s would not be allowed to go forward without major disposals of Safeway’s stores. However the bid from the Bradford based, William Morrison is expected to be cleared.
Morrison’s bid is more likely to be given the go ahead as the company is ranked fifth in the hierarchy of supermarkets and its stores are predominately in the north. Safeway’s is ranked fourth out of the UK’s supermarkets and its stores are mainly based in Southern England and Scotland.
Analysts have argued that allowing Morrison’s bid to go forward would create a much stronger fourth player in the food retail market, enabling it to compete with the likes of Tesco, Asda and Sainsbury.
Philip Green the entrepreneur has also shown an interest in taking over the Safeway supermarket chain. As Mr Green owns the group Arcadia, the high street retailing group, the Commission decided to exempt his bid, as he does not have any other interest in the food retail market.
