Asda said the deal, which is part of its plans to rapidly grow into the convenience market, will see 2,300 workers move over from the Co-op to the supermarket group. The new focus in forecourts and convenience stores comes after Asda’s £6.8 billion takeover by the Blackburn-based billionaire Issa brothers and private equity backers TDR Capital, who also own the EG Group forecourt giant.
In August, the Co-op first revealed plans to sell its 132 petrol stations and attached convenience stores in a bid to bolster its finances. 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 (CD&R), to sell off a number of petrol forecourts earlier this month over competition concerns.
The sale will result in 5% of Co-op’s retail estate, including the 129 petrol stations with grocery stores attached located across the UK and three development sites, being rebranded and folded into Asda, which already runs 323 petrol stations across the UK.
Brothers Mohsin and Zuber Issa and their private equity partner TDR Capital, who co-own the petrol station operator EG Group, bought the Asda supermarket chain and its filling stations in 2021.
The brothers already own about 700 forecourts, making them a significant player in Britain’s network of more than 8,000 petrol stations. The sale will result in 450 sites operating under the Asda brand.
The Co-op said it planned to open more convenience stores, and keep grocery prices competitive, also improving its technology and logistics.
The retailer has an annual revenue of about £11bn but in recent years it has been battling to control soaring debts, which rose to £920m according to its most recent results, up from £695m in 2019 and £550m in 2020.
