- Asda reaches agreement with The Co-op to acquire 132 convenience stores with PFS attached
- Acquisition will create a distinct new format for Asda in the convenience market
Asda today announces that it has agreed to acquire 132 sites from The Co-operative Group (“Co-op”) in a deal worth £438 million in cash*, in as part of its growth strategy to enter the convenience market and bring Asda value to more local communities.
The purchase includes 129 established, high-quality sites with a 1,500 to 3,000 square foot retail grocery store and attached gas station, and three development sites. They are located across the country and will create a distinct new format for Asda in the convenience market.
The transaction is subject to normal conditions and will be financed by a combination of existing cash resources and bank financing.
The approximately 2,300 colleagues currently employed in Co-op stores will transfer to Asda employment as part of the TUPE transfer after completion and after a transition period. The stores acquired in the transaction generated net sales of £863m and pro forma EBITDA of £53m for the 12 months to June 2022, with potential for further EBITDA growth when development opportunities and other synergies are taken into account.
Mohsin Issa, co-owner of Asda, said: “We have always been clear in our ambition to grow Asda and we are extremely excited about creating this distinct new 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 view convenience as an important growth opportunity for the business. This acquisition accelerates our strategy in this area and is part of our long-term ambition to become the second largest supermarket in the UK.
“We look forward to welcoming Co-op colleagues to this new part of our business after finalizing the transaction and formal processes in the coming months.”
* The transaction has a total value of approximately £600 million, including IFRS16 lease liabilities of approximately £162 million (final amount to be confirmed upon completion)