Supermarket giant Asda said today it was snapping up the UK arm of discount retailer Netto in a move set to add another 193 stores to its estate.
Asda, which is owned by US group Wal-Mart, has agreed a £778 million deal to buy the stores, which it aims to convert to the Asda brand by next summer.
The group said it hopes to complete the takeover later this summer, subject to regulatory approval.
Today's deal marks an ambitious first move by new Asda boss Andy Clarke, who took over the reins earlier this month.
Asda, which currently owns 374 stores, is aiming to boost its smaller format store portfolio and said the Netto outlets will be added to a new division set up for supermarkets smaller than 25,000 square feet.
Netto - owned by Danish group Dansk Supermarked - employs 3,500 staff in the UK having launched on these shores in 1990.
The average size of its stores is 8,000 square feet.
Supermarket share figures from Kantar Worldpanel this week revealed Netto had a 0.7% share of the grocery sector, but the discounters have seen previous stellar growth levels grind to a halt since the end of the recession.
Claus Juel-Jensen, managing director of Netto, said: "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."
Asda president and chief executive Mr Clarke added: "We very much look forward to welcoming Netto's colleagues into our business and joining our team.
"Customers will benefit from low prices on a significantly broader range of quality products, complemented by the wide range of services we offer in all our smaller stores."
The group hopes to increase staff numbers in Netto stores by "up to twice as many", although it is unclear how many outlets it will ultimately be able to retain after discussions with regulators.