Co-op sells petrol stations to Asda in £600m deal

The Co-op has agreed to sell its 129-strong petrol forecourt business to Asda in a deal worth £600m.

The Co-op said the sale of the sites, which represent 5% of its retail estate, would enable it to expand its network of grocery stores and also help it balance the books.

Asda said the purchase was part of plans to move into the convenience store market.

Asda will pay £438m and take on around £162m of lease liabilities in the deal.

The precise figure will be confirmed when the sale is completed later this year.

"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 Shirine Khoury-Haq, chief executive at the Co-op, which known for its supermarket chains and funeral care operations.

The 2,300 staff employed in the Co-op petrol station stores will be transferred to Asda's employment, the Co-op said.

Mohsin Issa, co-owner of Asda, said the deal provided "the opportunity to bring Asda value in fuel and groceries to even more customers and communities across the UK".

"We see convenience as a significant growth opportunity for the business. This acquisition accelerates our strategy in this area and forms part of our long-term ambition to become the UK's second largest supermarket."

Asda currently has 320 petrol stations across the UK. The deal for the Co-op's 129 forecourts include grocery retail stores.