The Daily Mail reported undisclosed sources saying that superstore chain Asda, the UK subsidiary of US retail giant Wal-Mart, is planning a takeover of Safeway for £2.8bn.

However, retail analysts believe any such deal is almost certain not to go ahead. One such source was quoted saying that government competition watchdogs would be unlikely to allow such a move.

The market shows that Asda has been outperforming its rival multiple stores and so is competing extremely well with market leader Tesco. Getting Safeway under its belt is therefore not expected to be deemed necessary by government in order for it to compete better with the UK's number-one grocer.

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