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October 4, 2022

Asda agrees £600m deal to acquire 132 Co-op sites

    Asda has today (August 31) confirmed it has agreed to acquire 132 sites from Manchester-based The Co-operative Group in a deal worth £438m.

    It is part of the supermarket chain’s growth strategy to move into the convenience market.

    The purchase includes 129 established sites with a grocery retail store of between 1,500 and 3,000 sq ft and attached petrol filling station, and three development sites. They are located nationwide and will create a distinct format for Asda in the convenience market.

    Asda says the deal is subject to normal conditions and will be financed through a combination of existing cash resources and bank finance.

    About 2,300 staff currently employed in the Co-op stores will transfer to Asda’s employment following completion and after a transition period.

    The stores being acquired as part of the transaction delivered net sales of £863m and pro forma EBITDA of £53m for 12 months to June 2022, with potential to grow EBITDA further when development opportunities are taken into account.

    Mohsin Issa, co-owner of Asda, said: “We have always been clear in our ambition to grow Asda and are hugely excited to create this new and distinct part of our business, giving us the opportunity to bring Asda value in fuel and groceries to even more customers and communities across the UK.

    “We see convenience as a significant growth opportunity for the business. This acquisition accelerates our strategy in this area and forms part of our long-term ambition to become the UK’s second largest supermarket.

    “We look forward to welcoming the Co-op colleagues to this new part of our business after we complete the transaction and due processes in the coming months.”

    Asda was taken over in a £6.8bn deal last year involving TDR Capital and the Issa brothers, who are behind Blackburn-based international fast food and petrol forecourts-driven EG Group.

    Shirine Khoury-Haq, Co-0p chief executive, said: “This transaction is in line with our strategy to move away from operating petrol forecourts and supports our vision of Co-operating for a fairer world while building our core leading convenience business.

    “I would like to thank our incredible colleagues in these stores, and we will work closely with Asda to ensure a smooth transition.”

    The deal has an enterprise value of approximately £600m, which will include a cash consideration of £438m and is also inclusive of IFRS 16 lease liabilities of approximately £162m.

    The transaction is due to complete in the fourth quarter of 2022.

    Posted by: Hireaperson Employment agency