Asda completes acquisition of 132 Co-Op sites as part of strategy to enter the convenience retail space; stores will remain separate from Asda while Competition and Markets Authority conducts inquiry into the deal

November 1, 2022 (press release) –

 

• Formal completion sees 132 grocery sites with attached PFS transfer to Asda ownership
• The stores will remain separate from Asda whilst the CMA conducts its enquiry into the deal
• Circa 2,300 colleagues will transfer to Asda employment as part of its new and distinct convenience business following the CMA enquiry

Asda has today confirmed that it has completed the acquisition of 132 grocery retail sites, with attached petrol stations, from The Co-Op as part of its strategy to enter the convenience retail space and create an exciting new part of the Asda business that brings Asda value to more Asda communities.

The acquisition, which was initially announced at the end of August for a cash value of £438m*, includes 129 high-quality existing sites across the UK with a retail store of between 1,500 and 3,000 square feet and attached petrol stations, and three development sites.

The circa 2,300 colleagues currently employed by The Co-op will move to Asda’s employment under TUPE transfer in the coming months, following consultation with USDAW.

Whilst the sale of the sites has now formally completed and Asda owns the 132 sites, the deal remains subject to regulatory approval from the CMA (Competition and Markets Authority). The CMA has issued an ‘Initial Enforcement Order’ requiring that the Co-Op sites remain entirely separate from Asda whilst the CMA conducts it investigation into the deal – a process that is expected to take until mid-2023.

During that time the sites will be run separately to the Asda business and only following formal approval of the transaction will colleagues be able to transfer to Asda’s employment and the stores made part of the Asda estate.

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.”

Notes to Editors

*The transaction has a total value of approximately £600m, inclusive of IFRS16 lease liabilities of approximately £162m.

Although the acquisition has closed it is still subject to regulatory review. Pending clearance, the parties are not permitted to take any steps amounting to preemptive action or integration of the businesses and Asda and Arthur will operate as separate businesses.

Based on third party Experian Catalist pump price data, Asda prices are on average approximately 5.5 ppl (unleaded)/5.8 ppl (diesel) lower than the Co-op (2021 UK averages). Co-op petrol stations bought by Asda in 2014 saw fuel prices fall by 3-4%. Across all 126 of the trading Coop sites acquired, Asda fuel pricing policies mean aggregate annual potential savings of up to GBP27.9m for motorists, or around GBP 220,000 per location.

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