By Charlotte Webster-
ASDA has confirmed the completion of its £600 million deal to buy the Co-op’s petrol forecourt business.
The supermarket, owned by the Blackburn billionaire Issa brothers said the move will see 2,300 workers move over from the Co-operative to Asda.
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The purchase by the supermarket giant includes 129 retail stores with attached petrol stations, with an additional three development sites. The deal was first announced by the company back in August. The sale is still awaiting regulatory approval from the Competition and Markets Authority (CMA), the Mirror reports.
The deal has been put in place as a part of its strategy to enter the convenience retail space and create a new part of the business that will bring Asda value to more Asda communities.
Asda has yet to release a full list of The Co-op sites that it is taking over, however, the 2,300 employees currently employed by The Co-op will be moved over to Asda.
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The acquisition has a cash value of £438million, but a total value of around £600million, inclusive of lease liabilities.
Each existing store is between 1,500 and 3,000 square feet in size and has petrol stations attached.
The CMA has issued an ‘Initial Enforcement Order’ requiring that the Co-Op sites remain separate from Asda whilst they conduct an investigation into the deal – a process that is expected to take until mid-2023.
Mohsin Issa, co-owner of Asda said: “We are delighted to formally complete the transaction that we announced in August and taking the next step on our journey to creating a new and exciting part of our Asda business.
“As millions of families deal with the day-to-day impacts of increasing costs of living, we’re committed to bringing Asda’s great value groceries and fuel to even more communities across the UK through these new stores.
“Over the last five years we’ve been consistently ranked as one of the cheapest providers of fuel in the UK and have been voted the Grocer’s best priced supermarket for 25 years in a row – meaning customers in these communities can look forward to saving millions annually on the cost of filling their shopping trolleys and tanks when Asda comes to town.
“We look forward to working collaboratively with the CMA on their investigation and to welcoming our new Asda colleagues to our great business in the coming months.”
The new focus in forecourts and convenience stores comes after Asda’s £6.8 billion takeover by the Issa brothers in 2020 and private equity backers TDR Capital, who also own the EG Group forecourt giant.
The Co-op first revealed plans to sell its 132 petrol stations and attached convenience stores in a bid to bolster its finances last August.
The Co-op said proceeds from the sale will be reinvested into its core convenience shops, pricing, stores operations and reducing its debt burden.
The UK competition watchdog is expected to look into the acquisition.
The Competition and Markets Authority (CMA) forced Morrisons’ new owner, US private equity firm Clayton Dubilier & Rice, to sell off a number of petrol forecourts earlier this month over competition concerns.
Asda said the CMA has already issued an initial enforcement order, meaning the Co-op sites must remain separate until any probe is completed.
The company said this process is likely to “take until mid-2023”.
Mohsin Issa said: “We are delighted to formally complete the transaction that we announced in August and taking the next step on our journey to creating a new and exciting part of our Asda business.
“As millions of families deal with the day-to-day impacts of increasing costs of living, we’re committed to bringing Asda’s great-value groceries and fuel to even more communities across the UK through these new stores.
“We look forward to working collaboratively with the CMA on their investigation and to welcoming our new Asda colleagues to our great business in the coming months.”
The brothers’ parents, Vali and Zubeda, moved to the UK in the 1970s to work in the textile industry, moving from Gujarat, India, to Bradford.
They later ran their own petrol station, where the brothers worked as teenagers.
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