Morrision Safeway Merger

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Morrisons is UK’s fifth largest food retailer, with a market share of 12%. Morrisons announced £2.9 billion pounds, takeover bid for the Safeway Chain of UK super markets. By the end of the month, list of potential buyers included, Morrison competitors like, Tesco, Wal-Mart, Sainsbury and Bhs fame, Philip Green. It all started on 9 January 2003: Morrisons made a £2.9m bid for Safeway, other rivals in January the 14th such as Asda and Sainsbury's make it a three-way takeover battle, but the battle was not over it had just began because on the 20th of January, Billionaire Bhs owner Philip Green also shows an interest in Safeways and joins the bid, two days later January 22 Tesco launches Safeway bid. US buyout specialist Kohlberg Kravis Roberts also expresses interest. Although with such large competitors Morrisions stood no chance at all, but it was soon discovered no company was legible enough to acquire Safeways so on the 26th of September, Morrisons given go-ahead for bid after inquiry by UK competition watchdogs, the finally on the 15th of December after a long battle Morrisons makes fresh £3bn offer for Safeway, and the deal was sealed. Reasons for Takeover: Takeover: when a company buys over 50% of the shares of another company and becomes the controlling owner of it. The objective of Morrisons taking over Safeways was to secure the growth of its business in a sustainable manner, while at the same time constantly improving the company’s profitability. Morrisons planned on doing this by setting these following objectives: • Striving in order to reach a leading position in attractive markets • Focusing on securing a competitive share of the supermarket segments. • Working in order to improve the company’s efficiency and cut costs in operations. • Continuous growth through selective acquisitions for as long as they are able to create shareholder

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