FoodWorks acquires 45 Coles supermarkets in $35m deal
Independent Australian food and grocery group FoodWorks has agreed to purchase 45 supermarkets and eight associated Liquorland outlets from Coles.
The transfer, announced this morning by Wesfarmers – the owner of Coles, is “part of Coles’ broader plan to improve its overall network of over 700 supermarkets and over 600 Liquorland stores and is an important step in the Coles turnaround”, according to the retailer.
Coles Managing Director Ian McLeod said the store transfer would allow both firms to reap benefits.
“We think this is a great outcome for team members and customers of both Coles and FoodWorks,” Mr McLeod said. “FoodWorks view these Coles supermarkets as valuable
additions to their existing portfolio of over 700 member stores.”
“I’m very pleased to advise that all store team members will be offered roles with FoodWorks and that they will retain all their existing employment entitlements.”
The cost of the acquisition is approximately $35 million, and includes payment for stock, cash and the transfer of employee entitlements.
“We’ll continue to focus on landing the right store formats in the right locations across Australia for our customers,” Mr McLeod added. “The renewal store program will see our supermarket store network continue to grow.”
Mr McLeod said the store renewal plan will see Coles over a net increase in jobs over the next twelve months.
The purchase of stores with annual revenue of around $450 million was seen as a great chance to “help accelerate FoodWorks’ growth strategy”, according to Chief Executive Peter Noble.
“It’s also very good for the independent sector, because while Coles has relinquished these stores, the independent industry gets them unencumbered,” he said.
The transaction, which remains subject to ACCC approval and the approval of FoodWorks’ shareholders, will see stores handed over to FoodWorks progressively over a nine month period.