Asda completes £600m swoop for Co-op’s petrol business

Co-up has completed the £600m deal to sell its petrol business Asda this morning.

The deal includes 129 petrol forecourt sites, spread across the UK and represents five per cent of Co-op’s retail estate of 2,564 stores.  

 Co-op said it would use the proceeds to reinvest in the convenience business and reduce net debt.

“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,” said Co-op chief exec Shirine Khoury-Haq.

Rothschild & Co acted as financial advisors to the Co-op, with Addleshaw Goddard acting as principal legal advisors. 

Asda currently runs 320 petrol stations across the UK, and was taken over by brothers Mohsin and Zuber Issa and TDR Capital last year.

They acquired the supermarket chain from US giant Walmart in a £6.8bn deal.

The deal was first announced in August, where Asda agreed to sell 27 of its forecourts in order to secure the acquisition following competition concerns by the regulator.

The Issa brothers own a filling station empire and there was concern Asda’s forecourts would be rolled into it.

Meanwhile, Co-op has been keen to free up cash, having announced earlier this summer it would have to cut around 400 jobs in the face of tough trading conditions worsened by rising inflation.

The group has offloaded a number of its divisions over the past decade, including its chain of pharmacies and travel shops.