British supermarket group Morrisons announced on Monday it had reached a deal to buy collapsed convenience store chain McColl’s after winning a battle against the owners of rival Asda.

In a deal structured through a so-called pre-pack administration, Morrisons, which has a wholesale supply deal with McColl’s, will take on all its 1,160 stores, including 270 Morrisons Daily format stores.

Morrisons will also take on all of McColl's workforce of 16,000 and its two pension schemes, which have over 2,000 members.

McColl’s went bust last week in the wake of supply strains and weak consumer spending as inflation soars.

The food and household products seller entered administration – the process whereby a distressed company calls upon outside help to try and minimize job losses – and plunged 16,000 staff into uncertainty.

"All McColl’s colleagues will be transferred with the McColl’s business to Morrisons," the supermarket group said on Monday as it confirmed the deal.

Morrisons CEO David Potts said it represented "a good outcome" for McColl’s stakeholders.

"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," said Potts.

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

Morrisons, which trails market leader Tesco, Sainsbury’s and Asda, has been owned since October by U.S. private equity group Clayton, Dubilier & Rice.

Britain’s fourth-largest supermarket chain beat off competition from EG Group, the petrol station and food retail business owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital.

EG was set to seize control of McColls after its lenders rejected a rescue deal from Morrisons on Friday. The brothers and TDR also own Asda.

However, over the weekend, Morrisons came back with a fresh proposal.

It is understood that Morrisons’ successful move will see it repay more than 160 million pounds ($198 million) in McColl’s debts.

McColl’s troubles come with Britain enduring a cost-of-living crisis, as U.K. annual inflation sits at a 30-year high of 7%.

The Bank of England (BoE) last week warned that British inflation would top 10%, a four-decade high, by the end of the year, fuelled by soaring energy prices.

And the BoE added that Britain risks falling into recession, as the central bank on Thursday raised its main interest rate by a quarter-percentage point to 1% – the highest level since the global financial crisis in 2009.

Consumer prices are surging worldwide on supply strains as economies reopen from pandemic lockdowns – and in the wake of the Ukraine war that is aggravating already high energy costs.

Britain’s cost-of-living crisis was blamed in part on Prime Minister Boris Johnson’s Conservative party losing control of key councils in local elections last week.

On Monday, a U.K. think tank, The Food Foundation, revealed a 57% surge in the proportion of British households cutting back on food or missing meals altogether between January and April.