Asda today snapped up budget rival Netto in a £778 million deal set to create more than 3,000 new jobs.

The deal will see Netto disappear from the UK high street after two decades, with all of its branches rebranded as Asda by next summer as the chain pushes into the smaller stores market.

The supermarket giant has bought the Danish retailer’s entire UK operation and 193 stores.

Asda, owned by US-based Wal-Mart, today promised a major jobs boost as a result of the deal, doubling the workforce at the converted Netto stores which currently employ 3,500 people.

The takeover will have to be approved by the Office of Fair Trading.

Asda is one of the UK’s four biggest supermarket chains alongside Tesco, Sainsbury and Morrisons.

It employs 150,000 people at nearly 350 stores nationwide but has been struggling to maintain market share.

In the West Midlands, Netto has branches in Wolverhampton, Coseley, Dudley, West Bromwich, Netherton, Cannock, Warley, Kidderminster and Birmingham.

The Scandinavian group says it plans to concentrate on its home market and Northern Europe.

Asda says it will integrate the Netto stores into a new supermarket division for stores smaller than 25,000 sq ft. Nettos in the UK average 8,000 sq ft.

Asda’s president and chief executive Andy Clarke said today: “Customers will benefit from low prices on a significantly broader range of quality products.”

Netto managing director Claus Juel-Jensen said: “Netto has been profitable and was appointed Discounter of the Year in 2009.

“As a major league player, Asda is the ideal purchaser of our UK business.

“We have substantial opportunities for growth in Scandinavia and Northern Europe and believe the time has come to focus our efforts on the development of our business in these countries.”