Sainsbury’s buys Co-op stores in a £83m deal
Published 05/03/2009 | 01:44
Sainsbury’s yesterday said it was buying 24 stores from The Co-operative Group in a deal worth £83m.
Of the stores, 22 belonged to the Somerfield grocery chain, which was taken over by The Co-operative Group earlier this week, and two were branded Co-op stores.
Sainsbury’s plans to spend a further £45m fitting out 19 of the stores as supermarkets, and the remaining five as Sainsbury’s Locals, its smaller outlets.
Chief executive Justin King said: “We are delighted to acquire these stores which are an excellent addition to our store estate and we are pleased to welcome 1,400 new colleagues to Sainsbury’s.”
The sale, conditional on approval from the Office of Fair Trading, will go through in May, with the conversion of the stores to Sainsbury’s branding taking two to three months.
The move adds a net selling area of 236,000 sq ft to the Sainsbury’s estate.
The Manchester-based Co-operative Group completed its £1.6bn takeover of Somerfield on Monday, a move cementing its position as the UK’s fifth largest food retailer.
The Co-op is taking on more than 650 Somerfield stores, but has had to offload branches in areas where watchdogs had concerns over competition.
A spokesman for The Co-operative Group said some Somerfield stores were being sold because of competition reasons, while others were being offloaded as they did not fit the group’s trading model.
Sainsbury’s currently has 785 stores, so the acquisition when completed will take its estate to more than 800.