UK supermarket group Wm Morrison has announced that it has agreed to sell 19 stores to rival supermarket chain Waitrose.
The sale is the first of the disposal transactions required by the undertakings given to the Office of Fair Trading (OFT) by Morrisons in December 2003. In order to gain competition approval for its takeover of larger rival Safeway, Morrisons agreed to dispose of 52 Safeway stores if the merger was successful.
Fourteen of the stores being sold to Waitrose are stores which Morrisons is required to sell as part of its agreement with the OFT. Eighteen of the stores being sold are Safeway stores. One store is the Morrisons store at Southport which Morrisons has elected to sell instead of the Safeway store in that location.
Morrisons said the aggregate book value of the net assets attributable to the 19 stores to be disposed of is £158m (US$285.5m). The retailer also said the sale prices of the stores are in line with its initial expectations.
Waitrose, the supermarket division of retail group John Lewis, said the stores being acquired will add over half a million sq ft of selling space to Waitrose’s existing 144 branches, an increase of some 20%.
The acquisition takes Waitrose into a number of new territories in the North of England and Wales and strengthens its presence in the South. Each of the stores being acquired will continue to be operated by Morrisons until they are converted to Waitrose stores in a phased programme over the coming months. This conversion process is expected to be completed in time for Christmas trading, Waitrose said.