Co-op sells petrol forecourt estate to Asda for £600m

Co-op has agreed to sell its petrol forecourt business to Asda in a £600m deal.

The enterprise value of approximately £600m, which includes a cash consideration of £438m and is also inclusive of IFRS 16 lease liabilities of approximately £162m.

This transaction includes 129 petrol forecourt sites, spread across the UK and represents 5% of Co-op’s retail estate of 2,564 stores.  

Co-op said the sale of the non-core petrol forecourt business enables it to “focus” on core convenience proposition whilst “significantly deleveraging and strengthening” the group’s balance sheet.

Co-op will reinvest into its core convenience business centred around its retail estate, as well as its growing wholesale, franchise and e-commerce operations.

Shirine Khoury-Haq, chief executive at the Co-op, said: “This transaction is in line with our strategy to move away from operating petrol forecourts and supports our vision of Co-operating for a fairer world while building our core leading convenience business.

“I would like to thank our incredible colleagues in these stores, and we will work closely with Asda to ensure a smooth transition.”

Mohsin Issa, co-owner of Asda, added: “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.”