The Co-op has agreed to sell its petrol forecourt business to Asda for £600m.
The deal includes 129 petrol filling stations with attached convenience stores across the UK, representing 5% of Co-op’s retail estate of 2,564 stores.
Under the agreement Asda will pay £438m in cash and take on responsibility for Co-op’s lease payments which total about £162m.
Co-op said that the sale would allow it to focus on its core convenience store business, including building new stores, as well as growing its wholesale, franchise and e-commerce operations. The transaction is also expected to reduce its debt levels and strengthen its financial position.
The stores transferring to Asda’s ownership recorded net sales of £863m and pro forma EBITDA of £53m in 12 months to June 2022.
For Asda, the deal supports its aim to move into the convenience market.
“We see convenience as a significant growth opportunity for the business,” said Mohsin Issa, co-owner of Asda. “This acquisition accelerates our strategy in this area and forms part of our long-term ambition to become the UK’s second largest supermarket.”
Asda currently has 320 petrol stations across the UK.
The sale is expected to be completed in the fourth quarter of this year.
