Morrison cleared for Safeway takeover

Supermarket group Wm Morrison landed a major blow on its larger rivals as the Government cleared the way for it to bid for Safeway.

Trade and Industry Secretary Patricia Hewitt gave the family-run firm the green light to make a move on the UK's fourth largest supermarket, but blocked rival bids from Tesco, Sainsbury's and Wal-Mart-owned Asda.

The ruling comes after a lengthy probe by the Competition Commission into the various bids and looks certain to reignite the nine-month-old battle.

Morrison, which has been told it will have to sell 53 Safeway stores, is now likely to go head-to-head with retail entrepreneur Philip Green in the fight for Safeway's hand.

Mr Green has yet to table a bid and escaped the competition probe because he does not already own any supermarkets.

The battle for Safeway's 479 stores kicked off in January when Morrison offered £2.9 billion to buy the chain but within days, the lines were set for a protracted battle as its larger rivals piled in.

Morrison, headed by Sir Ken Morrison, argued that its proposed takeover created a fourth force in UK supermarkets and would make it capable of facing up to market leader Tesco.

Mrs Hewitt said she agreed with the Competition Commission's conclusion that a takeover by Asda, Sainsbury's or Tesco could operate against the public interest "at both a local and national level".

She added that although there were areas where a Morrison's takeover could also act against the public interest, selling off stores should remedy the situation.

Besides the three supermarkets blocked from bidding for Safeway, other retailers will be queuing up to get their hands on the divested stores - Marks & Spencer is thought to be keen to buy 20 outlets while Waitrose is ready to take over 15 shops.

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