Irish supermarket chain Superquinn has been bought by rival Musgrave, a day after falling into receivership.

Musgrave - which operates the Budgens and Londis brands in the UK, and Supervalu and Centra in Ireland - will take on all Superquinn’s 23 stores and 2,800 staff. The price of the acquisition has not been disclosed.

Yesterday KPMG was appointed receiver to Superquinn, on the instructions of a consortium of banks which are owed around €400m, largely as a result of failed property investments according to Irish state broadcaster RTE.

The business will continue to be run as normal, with chief executive Andrew Street running the business for the time being. The deal will propel Musgrave to top position in the Irish market, overtaking Tesco.

Superquinn had been challenged by its debt burden, plus the difficult trading environment. Musgrave said it will invest in stores, and work with staff to develop the future of the business.

Chris Martin, chief executive of Musgrave said: “Having come to this agreement with the Joint Receivers, we are excited by this opportunity. Purchasing Superquinn, when approved, supports our growth agenda and will sustain our competitiveness.We are looking forward to working with the Superquinn team to develop the future of the business.”

Superquinn, whose sales are estimated at around €500m, has traditionally been positioned at the upper end of the Irish food market. Most of its stores are located in the Greater Dublin area. Founded by the legendary Irish retailer and politician Fergal Quinn, it was bought from him in 2005 for a reported €450m by a consortium of investors led by ex-Hamleys boss Simon Burke. Burke left the company earlier this year.