Purchase for £438m is part of Asda’s plan to become a player in convenience
Asda is stepping up its move into the convenience market with the acquisition of 132 sites from The Co-operative Group.
The purchase, for a cash value of £438m, includes 129 established sites with a grocery retail store of between 1,500 and 3,000 square feet and attached petrol filling station, as well as three development sites. They are located nationwide and will create a new and distinct format for Asda in the convenience market, the supermarket said.
The transaction is subject to normal conditions and will be financed through a combination of existing cash resources and bank finance.
The approximately 2,300 colleagues currently employed in the Co-op stores will transfer to Asda’s employment. The stores being acquired as part of the transaction delivered net sales of £863 million and pro forma EBITDA of £53 million for the 12 months to June 2022, with potential to grow EBITDA further when development opportunities and other synergies are taken into account, Asda said.
Mohsin Issa, co-owner of Asda, explained: “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.”