The Co-operative Group has agreed to sell a selection of locations including its petrol stations to Asda for £600 million.
The transaction will see Asda acquire 132 locations from the Co-op for a cash value of £438 million and an additional expense of £162 million for IFRS16 lease liabilities.
The deal comes as part of Asda’s growth strategy to move into the convenience market, which includes 129 established sites with a grocery store between 1,500 and 3,000 square feet and an attached petrol station.
Asda confirmed the agreement would be financed through a combination of existing cash resources and bank finance.
The stores included in the deal delivered net sales of £863 million and pro forma EBITDA of £53 million for the 12 months to June 2022.
“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,” said Asda co-owner Mohsin Issa.
“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.”