Analysts have not ruled out a rival bid, probably from Asda Wal-Mart, and Safeway shares closed at 256p, against the agreed bid price of 238p. But any bid from the another food retailer would almost inevitably run into regulatory problems as the UK government sees competition in the food sector as a key plank in its anti-inflation policy.
The Morrison-Safeway merger faces no such problems and in property terms the logic is compelling. Morrison is strong in the north of England with119 stores, while Safeway's 479 stores are concentrated in the South of England and in Scotland. Only ten out of the combined chain overlap, according to Morrison.
The new company will be based at Morrison's head office in Bradford, West Yorkshire, which will mean the closure of the HQ at Hayes, West London, with the loss of 1,200 jobs.
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