Asda has struck a deal to buy the UK stores of discount chain Netto, as part of the Wal-Mart subsidiary’s bid to run smaller stores in the country.The GBP778m (US$1.13bn) will lead to the UK’s second-largest retailer converting Netto’s stores to Asda outlets and integrate them into a new supermarkets division for units smaller than 25,000 sq ft.

Asda wants to run smaller stores in the UK and has said it sees much of the growth in the country’s grocery sector coming from smaller outlets.

Asda said it expects to win approval from the UK’s Office of Fair Trading later this summer and change Netto’s stores to its banner by the middle of 2011.

Netto, which set up a UK business in 1990, and operates 193 stores of an average size of 8,000 sq ft in the country.

It is the market leader in Denmark and has stores in Germany, Poland and Sweden.

Netto MD Claus Juel-Jensen said he wanted to focus on the chain’s stores in Scandinavia and northern Europe.

“We have substantial opportunities for growth in Scandinavia and Northern Europe and believe that the time has come to focus our efforts on the development of our business in these countries,” Jensen said.

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