SUPERMARKET giant Morrisons has won a takeover battle for collapsed convenience store chain McColl’s.

Morrisons said all McColl's staff will keep their jobs as the firm's shops transfer to the new owner, while the grocer will take over the company's two pension schemes.

The corner shop chain announced its administration on Friday, plunging the future of its 1,160 shops and 16,000 staff into doubt.

Global law firm Ashurst is advising Morrisons on its agreement to acquire the business of McColl's out of insolvency, agreed on Monday.

The lawyers said the transaction is being structured as a "pre-pack" agreement.

It came after Morrisons and forecourt giant EG Group both tabled final offers on Sunday to secure a rescue deal for McColl's.

EG - whose owners the billionaire Issa brothers also run Asda - had initially been favourites to complete a rescue deal for McColl's.

READ MORE: Grocery giants bid for collapsed retailer McColl's

Morrisons' early approaches had reportedly been rejected by lenders who preferred EG's offer to instantly repay more than £160 million in debts from McColl's.

However, it is understood that Morrisons' successful move will also repay the lenders in cash.

In a statement after the deal was announced, Morrisons said that "the secured lenders and preferential creditors will be paid in full with a distribution also expected to unsecured creditors".

Morrisons had also originally proposed to save the "vast majority" of job and stores, but improved this offer during the bidding process.

"All McColl's colleagues will be transferred with the McColl's business to Morrisons," the supermarket said on Monday.

HeraldScotland: Morrisons tabled a rescue deal for the Glasgow-founded convenience store.Morrisons tabled a rescue deal for the Glasgow-founded convenience store.

David Potts, Morrisons chief executive, said: "Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl's and all its stakeholders.

"This transaction offers stability and continuity for the McColl's business and, in particular, a better outcome for its colleagues and pensioners.

"We all look forward to welcoming many new colleagues into the Morrisons business and to building on the proven strength of the Morrisons Daily format."

Trustees for the McColl’s pension schemes have called on the Business Secretary Kwasi Kwarteng to do whatever he can to ensure pension scheme members are well protected.

A spokesperson for the McColl's Pension Schemes said: "The trustees welcome the announcement that Morrisons will continue to support the schemes following its acquisition of the McColl's business.

"The trustees will continue to engage with all stakeholders to ensure that members' benefits are protected following the completion of the transaction."

READ MORE: McColl's collapses into administration

McColl's filed a notice to appoint administrators from PwC on Friday and formally entered administration on Monday.

Morrisons is currently McColl's wholesale supply partner and the Bradford-based supermarket was one of the convenience chain's biggest creditors.

Largely trading in Scotland as RS McColl, it runs around 270 stores under the Morrisons Daily brand.

The deal comes less than a year after Morrisons itself was bought for £7 billion by US private equity company Clayton, Dubilier & Rice.

The Glasgow-founded convenience chain's administration came after a financial struggle over the past two years. It had experienced soaring costs due to supply chain disruption and inflation and had a large debt burden. Shares in McColl's were suspended last week amid financing talks.

RS McColl was co-founded by Robert Smyth McColl, a Rangers and Scotland player, and his brother Tom in 1901, and the group was set up in 1973.