RNS Number:9737S
Dept Trade & Industry
08 December 2003

HEWITT ACCEPTS UNDERTAKINGS ON SAFEWAY MERGERS

Trade and Industry Secretary Patricia Hewitt today announced that she had
accepted undertakings from Asda Group Limited, Wm Morrison Supermarkets plc, J
Sainsbury plc and Tesco plc in relation to their proposed acquisitions of
Safeway plc.

The undertakings accepted from Morrisons require them to sell stores in areas
where local competition concerns would arise as a result of the acquisition.
The undertakings accepted from Asda, Sainsbury's and Tesco require them not to
acquire Safeway, or any part of Safeway whose acquisition may in the view of OFT
give rise to the adverse effects specified in the Competition Commission (CC)
report.

This follows the Competition Commission report of 26 October 2003, which found
that all four proposed acquisitions may be expected to operate against the
public interest.

Ms Hewitt said:

"The Office of Fair Trading has advised me that they have obtained the
undertakings which I have asked them to seek from Asda, Morrisons, Sainsbury's
and Tesco. I believe they satisfactorily address the concerns identified by the
Competition Commission in its report, and have therefore decided to accept the
undertakings offered."

The parties have signed the undertakings.

The acceptance of these undertakings means that Morrisons are now free to make
an offer for Safeway, should they choose to.  Asda, Sainsbury's and Tesco are
now in a position to bid for some of the stores Morrisons have undertaken to
divest as a condition of buying Safeway, and to seek consent from the Office of
Fair Trading to acquire any other collection of Safeway assets.



Notes to Editors

1. The proposed acquisition of Safeway by each of Asda Group Limited, Wm
Morrison Supermarkets PLC, J Sainsbury plc, and Tesco plc was referred to the
Competition Commission on 19 March 2003 under the Fair Trading Act 1973 (DTI
Press Notice  P/2003/173). The CC submitted its report on 18 August 2003. The
Secretary of State announced her decision to accept the CC's conclusions and
recommendations on 26 September 2003 (DTI Press Notice P/2003/488).  The
Secretary of State made a statement to the Stock Exchange, clarifying the scope
of the undertakings she would be minded to accept, on 11 November 2003 (DTI
Press Notice P/2003/551).

2. The Fair Trading Act empowered the Secretary of State to refer to the CC for
investigation and report actual or proposed mergers which created or increased a
market share of over 25 per cent of the supply in the UK (or a substantial part
of the UK) of particular goods and services or which involved the takeover of
assets exceeding #70 million. Subject to transitional provisions (which applied
in this case), the merger provisions have been superseded by the Enterprise Act
2002.

3. Copies of the report "Safeway plc and Asda Group Limited (owned by Wal- Mart
Stores Inc); Wm Morrison Supermarkets PLC; J Sainsbury plc; and Tesco plc - A
report on the mergers in contemplation" (Cm 5950) are available from The
Stationery Office, price #46.70. The report is also available on the CC website:

http://www.competition-commission.org.uk/



4.  The undertakings accepted from Morrisons require them to divest stores to
acquirers approved by the OFT.  The stores in question are those set out in
Table 2 of Appendix 5.6 (in respect of one-stop stores) and Table 2 of Appendix
5.7 (in respect of smaller stores) of the CC report.  There is scope for the OFT
to consider new and additional representations as to whether any of these stores
do not need to be divested.  If the OFT concludes that a store does not need to
be divested they will make a Stock Exchange announcement to that effect.

5.  Undertakings accepted from Asda, Sainsbury's and Tesco require them not to
acquire the whole of Safeway, or any part of it if that acquisition would give
rise to the adverse effects identified in the CC report.  The OFT will determine
whether any proposed Safeway asset or collection of Safeway assets would, if
sold to one of these parties, give rise to the adverse effects and is therefore
caught by the undertakings.  The OFT have indicated that they would expect their
consideration of any such request for consent to proceed by way of a public
process, allowing interested third parties the opportunity to comment.

6.  For non-media enquiries, full texts of the undertakings in this case are
available from Janet Moore, Consumer & Competition Policy Directorate, DTI
(telephone 020 7215 6460, fax 020 7215 6565, e-mail Janet.Moore@dti.gsi.gov.uk).







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