Asda stores acquires Co-op petrol forecourts for $693 million

Renowned British supermarket chain, Asda has reportedly finalized its $693 million (£600 million) deal for buying the Co-op's petrol forecourt business.

According to the firm, the deal, which falls under its strategy of growing in the convenience market, will transfer 2,300 workers from the Co-op to the supermarket group. 

Apparently, this new focus on forecourts and convenience stores follows Asda's $7.8 billion (£6.8 billion) buyout by leading capital market firm, TDR Capital and billionaire Issa brothers, who are also the owners of the EG Group forecourt giant.

Earlier, in August, the Co-op first disclosed its plans to sell its 132 petrol stations as well as attached convenience stores in view of boosting its finances.

Moreover, the Co-op plans to use the proceeds from the sale to reinvest in its core convenience shops, stores operations, pricing and reducing its debt burden.

Speaking on the latest move, Mohsin Issa, co-owner of Asda, stated that the firm is excited about finalizing this transaction, which was announced in August, as this is a step forward in building a new and exciting part of the Asda business.

Mohsin highlighted that as millions of families deal with rising living costs, Asda is committed to offering its great-value fuel and groceries to even more communities across the U.K. via these new stores.

Mohsin further mentioned that the firm looks forward to collaboratively working with the CMA on their investigation and welcoming new colleagues into Asda's business in the coming months.

The U.K.’s competition watchdog will likely investigate the acquisition.

In response to the competition concerns, the Competition and Markets Authority (CMA) ordered Morrisons' new owner, U.S. private equity firm, Clayton Dubilier & Rice (CD&R), to sell off several gas stations earlier this month.

Reportedly, Asda has stated that CMA has already issued an initial enforcement order, which implies that the Co-op sites will remain an independent identity until any probe is completed.

According to the firm, the process will be completed by mid-2023.

Source credit - https://uk.finance.yahoo.com/news/asda-seals-600-million-takeover-074843071.html