After more than a year of negotiations and investigations, Morrisons should finally complete the takeover of Safeway next week - on 8 March, to be precise. The last day of dealings in Safeway shares will be 5 March, and the following Monday Safeway will become a wholly-owned subsidiary of Morrisons.
With sales of around £13 billion, the combined Morrisons/Safeway group will be a major force in the UK retail sector, and is already seen as a major threat to its nearest rival, the struggling Sainsbury group.
Morrisons will gain a nationwide footprint for the first time, while Safeway's somewhat outdated stores and trading style should benefit from Morrisons' price-driven policy and its innovative 'store-within-store' format - although integrating the two highly different groups will be a difficult and lengthy task.
Morrisons' initial offer for Safeway came in January 2003 and was rapidly followed by rival offers from larger groups Tesco, Sainsbury and Asda. This in turn prompted a major investigation by the Competition Commission which ruled that only Morrisons should be allowed to proceed with the takeover - provided it agreed to sell 52 stores.
Safeway's trading performance has suffered as a result of the year-long delay, and Morrisons will undoubtedly focus its initial efforts on this particular area. Recent figures from TNS show that Safeway's sales fell by 4 per cent in the 12 weeks to 7 December, pushing its market share down from 10.1 per cent to 9.2 per cent.
The problem is primarily one of price - Safeway has some of the highest prices in a market which is becoming increasingly price-conscious - and this is where the effect of the takeover by Morrisons will be seen the most clearly: Safeway customers are likely to see prices fall by up to 6 per cent as a result of the takeover.
Asda man for Sainsbury?
Meanwhile, Sainsbury's search for a new chairman took an interesting turn yesterday when former Asda chief Archie Norman threw his hat into the ring.
Sainsbury's reputation was seriously tarnished last month by the appointment - and subsequent resignation - of former Bass chief Sir Ian Prosser, an uninspired choice which was fierecly criticised by shareholders. The company is still looking for a candidate to replace Sir Peter Davis when he retires later this year.
According to UK press reports, Norman has not been approached by Sainsbury but said he would be extremely interested in giving up his political career (he is the MP for Tunbridge Wells) and returning to the retail sector.
Norman is widely credited with turning around the somewhat downmarket Asda group of the early 1990s, paving the way for the eventual takeover by Wal-Mart and Asda's rise up the retail rankings - overtaking Sainsbury in the process.
If Sainsbury is to fend off the challenge of Morrisons in the coming months, a chairman in the style of Norman - and with his retail experience - would certainly be a major advantage. However, the reports suggest that Sainsbury is unlikely to approach Norman because he is unwilling to work alongside Davis until the latter retires later this year.