Asda moves into convenience market with acquisition of 132 Co-op stores
As part of a strategy to move into the convenience grocery market, UK supermarket Asda is set to acquire 132 stores from the Co-operative Group worth £438 million.
Asda said that the sites are located nationwide and will create “a new and distinct format” for Asda in the convenience market.
The purchase includes 129 sites with a grocery retail store of between 1,500 and 3,000 square feet, an attached petrol filling station and three development sites. It is also reported that 2,300 colleagues currently employed in the Co-op stores will transfer to Asda’s employment.
The Co-op stores delivered net sales of £863 million and pro forma EBITDA of £53 million for 12 months to June 2022. Asda reported the cash value of the sites they are acquiring from The Co-operative Group is £438 million.
The transaction has a total value of approximately £600 million, inclusive of IFRS16 lease liabilities of approximately £162 million. ASDA said that the final amount is to be confirmed on completion.
Accelerating company ambitions
Asda co-owner Mohsin Issa said this “new and distinct part our business” will create the “opportunity to bring Asda value in fuel and groceries to even more customers and communities across the UK.”
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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