Fuel, be amazed: Co-op sells petrol business for PS600m to rival Asda Petrol Stations
Co-operative Group (Co-op), has announced that it will sell its petrol forecourt business, valued at PS600m to Asda.
This transaction comprises 129 petrol forecourts sites spread across the UK. It represents five percent of Co-op’s retail estate of 2,564 shops.
The company will reinvest the funds in its stores and ecommerce operations while expanding its reach with additional shops across the country.
It will also be able to support its efforts at reducing its net debt.
Shirine Khoury-Haq is the Chief Executive of the Co-op. She stated that this transaction was in line with our strategy of moving away from petrol forecourts. It also supports our vision to Co-operate for a fairer and more inclusive world, while we continue to build our core convenience business. We will be working closely with Asda in order to make sure that the transition is smooth. I want to thank all of our amazing colleagues from these stores.
The acquisition is expected to be completed during the fourth quarter 2022.
In response to market rallies across both major oil benchmarks, petrol prices rose to new highs earlier this summer at 191.27 p/litre for unleaded gasoline and 199.01 p/litre for diesel.
Although prices have fallen, remains historically high at 170.05 per Liter for unleaded gasoline and 183.19 for diesel.
Asda currently operates 320 petrol stations in the UK. It was acquired by brothers Mohsin, Zuber Issa, and TDR Capital last January.
In a deal worth PS6.8bn, they bought the supermarket chain from the US Walmart giant.
Asda was willing to sell 27 of its forecourts to satisfy regulator competition concerns.
The Issa brothers have a filling station empire, and there were concerns that Asda’s forecourts might be rolled into it.
Co-op is keen to release cash. It announced earlier this year that it would be cutting around 400 jobs to meet the tough trading conditions. This was in response to rising inflation.
Over the past decade, the group has sold a lot of its divisions, including its chain pharmacy and travel shop chains.
