// Asda is the frontrunner to buy the forecourt business of Co-op in major convenience move
// Big Four grocery retailer would see convenience arm super-charged with around 130 new stores
Supermarket group Asda is preparing a £450 million swoop on the Co-op Group’s petrol forecourt business.
The move will accelerate a long-awaited move into Britain’s convenience store market with Sky News reporting that Asda is the leading contender to buy the mutual’s fuel retailing arm, which includes a substantial convenience operation.
It is believed that a deal could be struck as soon as this week, although parties other than Asda remain interested in the Co-op assets.
Asda has a fledgling convenience format called Asda on the Move, but it is far smaller than Big Four rivals Tesco and Sainsbury’s.
However, if Asda does win the auction, it would significantly boost the privately-owned supermarket chain’s market presence in convenience retailing.
People close to the Co-op process confirmed to Sky News that it is Asda rather than Issa brothers company EG Group that is in talks to buy the assets.
READ MORE: Co-op to sell 130 petrol stations for £450m in a bid to reduce debts
Co-op has been working with bankers at Rothschild to explore a sale of its estate of around 130 petrol forecourt sites, with the proceeds from the sale to be used to reduce the mutual’s debt levels.
The sale will also provide capital to invest in digital capabilities across other areas in which it operates.
News of the prospective sale came days after the company announced the appointment of Shirine Khoury-Haq as its first female chief executive.
The group, which is best-known for its supermarkets and funeralcare operations, is striving to reduce its borrowings at a time when inflationary pressures and a deteriorating economic backdrop are threatening its profitability.
If the sale of the fuel retailing arm goes ahead, it will be the latest in a series of divisions to have been offloaded by the Co-op over the last decade.
It previously disposed of its chain of pharmacies and travel shops, while it is no longer a shareholder in the Co-operative Bank following a number of crises which almost led to its collapse.
Click here to sign up to Retail Gazette‘s free daily email newsletter
