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Asda in pole position to snap up Co-op’s forecourt retail division


Asda to buy co-op forecourt retail
Asda is the frontrunner to buy co-op forecourt retail division in £450 million deal
// Asda is the frontrunner to buy the forecourt business of Co-op in major convenience move
// Big four grocery retailer would see convenience arm super-charged with around 130 new stores

Supermarket group Asda is preparing a £450 million swoop on the Co-op Group’s petrol forecourt business.

The move will accelerate a long-awaited move into Britain’s convenience store market with Sky News reporting that Asda is the leading contender to buy the mutual’s fuel retailing arm, which includes a substantial convenience operation.

It is believed that a deal could be struck as soon as this week, although parties other than Asda remain interested in the Co-op assets.

Asda has a fledgling convenience format called Asda on the Move, but it is far smaller than big four rivals Tesco and Sainsbury’s.

However, if Asda does win the auction, it would significantly boost the privately-owned supermarket chain’s market presence in convenience retailing.

People close to the Co-op process confirmed to Sky News that it is Asda rather than Issa brothers company EG Group that is in talks to buy the assets.

READ MORE: Co-op to sell 130 petrol stations for £450m in a bid to reduce debts

Co-op has been working with bankers at Rothschild to explore a sale of its estate of around 130 petrol forecourt sites., with the proceeds from the sale tobe used to reduce the mutual’s debt levels, strengthening its balance sheet.

The sale will also provide capital to invest in digital capabilities across other areas in which it operates.

News of the prospective sale came days after the company announced the appointment of Shirine Khoury-Haq as its first female chief executive.

The group, which is best-known for its supermarkets and funeralcare operations, is striving to reduce its borrowings at a time when inflationary pressures and a deteriorating economic backdrop are threatening its profitability.

If the sale of the fuel retailing arm goes ahead, it will be the latest in a series of divisions to have been offloaded by the Co-op over the last decade.

It previously disposed of its chain of pharmacies and travel shops, while it is no longer a shareholder in the Co-operative Bank following a number of crises which almost led to its collapse.

Other petrol retailers have also explored sale processes in recent months, although a £4 billion auction of Motor Fuel Group is unlikely to proceed for the time being because of the state of debt financing markets.

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