Co-Op Takes Over Rival Retailer

The Co-operative Group has agreed to buy supermarket firm Somerfield for pounds1.565 billion on a cash-free-debt-free basis.

The Co-op Group this week announced it had bought the chain, which operates about 880 retail outlets in the UK – many in and around Plymouth.

The combined food business will operate more than 3,000 grocery stores and generate net sales of about pounds8bn, making it – say bosses – a ‘market leader in convenience food retailing and the fifth largest food retailer in the UK’ with a market share of about eight per cent.

Peter Marks, chief executive of The Co-operative Group, said: “This is good news for consumers and competition in the grocery market where we will create a stronger fifth player in food and a convenience store chain with unrivalled geographic reach.”

In the year to April 2008, Somerfield generated net sales of pounds4.2bn, and earnings before interest, tax and depreciation of pounds233m. At the year end net assets totalled pounds1.3bn.

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