Co-op Set To Finalise Somerfield Takeover

Wed, 16 Jul 2008
 
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The Co-operative Group is this week expected to complete its long-awaited £1.6 billion takeover of rival supermarket chain Somerfield .

Both parties reached an agreement on sale terms on Friday subject to approval from the Office of Fair Trading (OFT).

The acquisition of Somerfield will take Co-op's portfolio to more than 3,100 supermarkets and convenience stores and annual sales of £10 billion, making it the UK’s fifth-largest supermarket chain with an 8 per cent share of the UK grocery market.

The consortium that bought the Somerfield chain, led by private equity group Apax, for £1.1bn in 2005 had initially hoped to sell the business for around £2.5 billion when it put the company up for sale in January – prior to the credit crunch.

The shareholders received an offer from The Co-op for £1.7 billion in April, although it is understood that the final price will be closer to £1.55 billion.

The Co-op is not likely to reveal the number of Somerfield stores that it expects to sell to larger rivals, such as Asda and Tesco, until the acquisition has been scruntinsied by fair trading officials.

It is thought that 120 of Somerfield's 900 sites could be sold on.

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