Asda has agreed to acquire 132 convenience stores from The Co-operative Group (Co-op) in a cash deal worth £438m, however the total transaction value stands at around £600m. The news was confirmed by the supermarket giant on Wednesday, August 31.
The move is part of Asda's "growth strategy" which will see the retailer move into the convenience market. Around 2,300 Co-op staff members will transfer to Asda’s employment under TUPE transfer following completion and after a transition period.
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."
On the diversification into convenience stores, Mohsin added: "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."
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The purchase includes 129 established sites with a grocery retail store of between 1,500 and 3,000 square feet and attached petrol filling station, and three development sites. They are located nationwide and will create a new and distinct format for Asda in the convenience market.
Nottinghamshire Live has contacted Asda for further details about specific stores in our area. The transaction is subject to normal conditions.
In the meantime, Asda says that the stores being acquired as part of the transaction delivered net sales of £863 million and pro forma EBITDA of £53 million for 12 months to June 2022, with potential to grow EBITDA further when development opportunities and other synergies are taken into account. The deal is being financed through a combination of existing cash resources and bank finance.
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