Asda set to acquire 132 Co-op stores

Supermarket chain Asda, co-owned by the Blackburn-based Issa brothers, has agreed to acquire 132 sites from The Co-operative Group in a deal worth around £438m.

The purchase includes 129 established grocery retail stores of between 1,500 and 3,000 sq ft, an attached petrol filling station, and three development sites.

The stores being acquired as part of the transaction recorded net sales of £863m and pro forma EBITDA of £53m for 12 months to June 2022.

The workforce of around 2,300 currently employed in the Co-op stores will transfer to Asda’s employment under TUPE transfer following completion and after a transition period.

The transaction has a total value of approximately £600m, inclusive of IFRS16 lease liabilities of approximately £162m. The final amount to be confirmed on completion. The transaction is subject to normal conditions and will be financed through a combination of existing cash resources and bank finance.

Mohsin Issa, co-owner of Asda, said: “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."