Supermarket boss Sir Ken Morrison today announced a massive £2.9 billion swoop for rival Safeway and boasted: "This is good news for Bradford."

The takeover announced today will see Bradford-based Morrisons become the third biggest supermarket chain in the country, with a 16 per cent market share.

The company will still be based in the city, with a new headquarters to be built on a 17-acre site at Gain Lane, Thornbury, Sir Ken announced today.

The majority of Safeway's 479 stores will now be re-branded under the Morrisons logo, with only 123 smaller stores keeping the Safeway brand.

Sir Ken, executive chairman, said: "I think it will be very positive for Bradford.

"We're building a new head office, it's good news."

Sir Ken said the takeover would allow the company to continue with its programme of expansion.

"I think it reflects the opportunities to expand at the pace we would like to," he said.

"This is a good opportunity to pick up extra space and give us the opportunity to develop our business very rapidly."

And he said he was amazed at how far the business had developed since it was launched in Bradford by his father in 1899.

"It's taken a little while but it's a gradual process," he said. "You don't set off with the idea of employing 140,000 people, it just accumulates."

While seen as a predominantly northern brand, Sir Ken said the Morrisons chain - currently with 119 stores and more to come this year - would prove popular in the south of the country.

"People understand value down there just as well as they do in Yorkshire," he said.

The company said it did not expect the merger to be blocked by the Competition Commission as the two companies have different customer bases.

And the merger is not expected to cause any job losses in the Morrison group.

"It will be quite the reverse - we are expecting to open a number of new stores which would probably create 3,000 to 4,000 jobs in shops," Sir Ken said.

"But we will be closing Safeway's head office, and that is expected to incur some job losses."

Safeway's shares jumped almost 30 per cent in early trading today - up to £2.75, while Morrisons dipped seven per cent to £1.95.

The deal has been recommended by Safeway's board but still has to be passed by shareholders.

Following the deal, Morrisons shareholders would own 53 per cent of the firm while Safeway would own 47 per cent.

Safeway shareholders would receive 1.32 new Morrisons share for each Safeway share held. The offer values each Safeway share at 277.5p.