Australian independent grocery wholesaler Metcash Trading is to acquire the Franklins chain of stores from Pick ‘n’ Pay for AU$125m (US$104.75m).
The deal, announced today (1 July), will include Franklins 85 supermarkets, comprising 77 corporate stores, plus supply to eight franchised stores.
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The payment will be made on completion and is expected by 30 September.
Metcash said it proposes to implement a store sale programme upon completion to sell the stores to independent IGA retailers. Metcash will operate the stores in the intervening period while the programme is completed, which could take several months.
“The IGA network will significantly improve its competitive position against the national chains in Australia’s largest grocery market, NSW, while growing the market share of Metcash supplied retailers in the state from 11% to 17%,” said Metcash chief executive, Andrew Reitzer.
“Metcash expects the independent retailers who purchase the stores will lift each store’s performance through the successful combination of their own retailing expertise and through utilising the strength, services and support provided by Metcash,” he added.
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By GlobalDataThe acquisition is expected to add more than $500m per annum of wholesale sales to Metcash’s business.
The transaction is subject to, among other things, ACCC approval and will be funded from existing Metcash bank facilities.
