Wednesday, July 16, 2008
The Co-operative Group (Co-op) and Bristol-based Somerfield today agreed on a deal worth £1.565 billion which results in Somerfield being acquired by Co-op. Co-op has said that the acquisition took place on a “cash-free debt-free basis.”
Peter Marks, chief executive of The Co-operative Group, claimed that “this is good news for consumers and for competition in the grocery market, where we will create a stronger fifth player in food and a convenience store chain with unrivalled geographic reach.” He then said that “for The Co-operative Group this is a transformational deal – cementing our position as the UK’s premier community retailer and helping us significantly as we lead a renaissance of The Co-operative brand. “
Paul Mason, chair of privately-held Somerfield, also commented on the takeover. “The Co-operative Group and Somerfield have a similar focus in terms of customers, store types, product ranges and business vision. Our shared vision of providing a high-quality and affordable convenience offer to local communities means that together we will be twice as strong, and therefore twice as able to deliver the local grocery shops British customers demand,” he said.
With 4.4% share of the market, the Co-op is the fifth largest grocery chain in the UK. Somerfield is the seventh largest with a 3.7% share. The owners of Somerfield made their wish to sell the company clear in January of this year. Co-op first expressed an interest in the purchase in April.