Morrisons is planning to expand its chain of supermarkets by buying 16 former Netto budget stores from rival Asda.

The £28 million deal will increase the Bradford-based company’s stores network to 453 and add 120,000 sq ft of retail space.

The acquisition is conditional on Asda’s acquisition of Netto UK being given final approval by the Office of Fair Trading.

The handover of stores is expected begin in March and take three months to complete.

Dalton Philips, Morrisons chief executive, said: "These additional stores are an important next step in Morrisons’ growth."