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Last Updated: Monday, 8 March, 2004, 11:15 GMT
Morrisons seals Safeway takeover
Morrisons store
Morrisons tabled its initial bid for Safeway in January 2003
Britain's supermarket landscape has undergone sweeping change on Monday as Morrisons completes its 3bn ($5.2bn) takeover of rival grocer Safeway.

The move brings to a end one of the most keenly contested UK acquisition struggles in recent years.

Bradford-based Morrisons sparked a bid battle for Safeway last year after launching a 2.9bn offer for the firm.

It claimed victory after the government ruled against rival supermarket group bids on competition concerns.

In mid-morning trade on the London Stock Exchange, shares in Morrisons were down 0.5 pence at 248.5 pence.

New look

Britain's big three supermarket chains - Tesco, Asda and Sainsbury's - all made counter offers for Safeway, along with billionaire retail entrepreneur Philip Green.

The battle for Safeway
9 January 2003: Morrisons makes 2.9m bid for Safeway
14 January: Rivals Asda and Sainsbury's make it a three-way takeover battle
20 January: Billionaire Bhs owner Philip Green throws his hat into the ring
22 January Tesco launches Safeway bid. US buyout specialist Kohlberg Kravis Roberts also expresses interest
26 September: Morrisons given go-ahead for bid after inquiry by UK competition watchdogs
15 December: Morrisons makes fresh 3bn offer for Safeway

Morrisons' takeover of Safeway - which will give the grocer a bigger slice of the market in southern England - increases the pressure on Sainsbury's for third place in the UK supermarket rankings.

The enlarged group will operate more than 550 stores, and plans are already in place to rebrand many of the larger Safeway stores as Morrisons.

The group is also considering converting nearly 180 medium size Safeway stores into a "Morrisons Compact" brand, to challenge the likes of Tesco and Sainsburys which operate smaller branded town centre outlets.

Annual savings

Unlike Morrisons' original offer, the revised deal comes with a cash element - 60p per share - designed to appease stockholders disappointed that the original bid was made entirely in shares.

Family-run Morrisons expects to achieve annual cost savings of some 215m from the takeover, compared with an earlier estimate of 250m.

South American mining group Antofagasta has taken Safeway's place in the FTSE 100 Index.

Shareholders back bid for Safeway
11 Feb 04  |  Business
Safeway's seasonal sales slump
19 Jan 04  |  Business
Supermarket price war predicted
12 Jan 04  |  Business
Morrisons in 3bn bid for Safeway
15 Dec 03  |  Business
What now for Safeway suitors?
26 Sep 03  |  Business

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