British supermarket chain Morrisons has secured the deal to acquire struggling convenience chain McColl’s, defeating its rival bidder EG Group.
Morrisons made an improved bid over the weekend after its offer was rejected last week.
Structured via a pre-pack administration, the retailer will acquire all 1,160 of McColl’s stores, which will include 270 Morrisons Daily format stores.
Morrisons has agreed to retain all 16,000 McColl’s colleagues together with the McColl’s business.
In addition, the company has decided to take over McColl’s two pension schemes, which serve around 2,000 members in total.
Morrisons has also said it will pay its secured lenders and preferential creditors in full, with a distribution expected to unsecured creditors.
McColl’s administrator, PricewaterhouseCoopers (PwC), placed the retailer into administration on 9 May before selling it to Alliance Property Holdings, a part of Morrisons Group.
Morrisons chief executive David Potts said: “Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders.
“This transaction offers stability and continuity for the McColl’s business and, in particular, a better outcome for its colleagues and pensioners.
“We all look forward to welcoming many new colleagues into the Morrisons business and to building on the proven strength of the Morrisons Daily format.”
Prior to this acquisition, Morrisons partnered with McColl’s as a supplier. The retailer also converted hundreds of McColl’s shops to Morrisons Daily convenience stores.
Morrisons has said it will ensure that the deal does not interrupt its wholesale supply agreement with McColl’s. McColl’s stores will also continue to trade during the transition period.
Earlier this month, the UK’s Competition and Markets Authority (CMA) said it was considering accepting a proposal from Morrisons’ buyer Clayton, Dubilier & Rice (CD&R) to sell 87 petrol station forecourts.
CD&R won an auction to buy Morrisons for £7bn ($9.5bn) in October last year.