The British government gave family-run grocer William Morrison Supermarkets a clear run today at takeover target Safeway after blocking bids for the firm from bigger industry rivals.
The result, widely anticipated, stops industry leaders Tesco, J Sainsbury and Wal-Mart's Asda from swallowing the country's fourth-largest supermarket chain and could now create a more powerful rival for them.
Trade and industry minister Ms Patricia Hewitt said the country's top three chains would not be allowed to buy any part of Safeway other than 53 stores Morrison would have to divest in areas where its stores overlapped with Safeway's 480 shops.
"The proposed acquisitions of Safeway by Asda, Sainsbury's and Tesco may all be expected to operate against the public interest, and should be prohibited," Ms Hewitt said.
Morrison kicked off the bidding war in January with a £2.9 billion all-share offer, which has since lapsed. It may yet face competition from UK retail baron Mr Philip Green who has expressed an interest in bidding but has been waiting for today's decision before deciding on his next move.
The decision also makes it more likely that private-equity buyers will enter the race in the hope of picking up a bargain.