UK: Sainsbury’s acquires Co-op stores
The deal will see Sainsbury's take control of 22 Somerfield outlets and two Co-op branded stores, with net selling space of 236,000 square feet.
Sainsbury's 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 deal, which still requires competition approval, is expected to go through in May.
Sainsbury's will then convert 19 outlets to its supermarket banner while five stores will be refurbished as Sainsbury's Locals, the group's convenience format. The stores are expected to reopen in the first half of fiscal 2009 and the cost of conversion is expected to total GBP45m.
The acquisition will be funded through existing cash resources and it expected to be "slightly dilutive" to earnings in fiscal 2009 and enhance earnings the following year.
A spokesperson for Sainsbury's told just-food that the acquisition was part of a broader aim to increase selling space and follows news that the company is both expanding in the north of England and increasing its convenience portfolio.
"We have a three-year target to increase selling space by 10%, which we are on-target to achieve. This includes expanding into markets where we have a small presence and opening new stores. We will be looking at future opportunities to increase selling space and open new outlets," the spokesperson said.
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