Manchester-based Co-op Group announced the completion of the sale of its non-core petrol forecourt business to Leeds-based Asda for an enterprise value of £611 million.

The acquisition is still subject to regulatory review. Asda said the petrol forecourt business “will remain separate from Asda” while the Competition and Markets Authority (CMA) conducts its enquiry into the deal.

“This follows the previous announcement on 31 August 2022, that Co-op had entered into an agreement to sell the 129 petrol forecourt sites to Asda, following a formal sale process,” said the Co-op.

“Sale proceeds will be used to reinvest into Co-op’s leading core convenience business, pricing, store operations, technology, and logistics, as well as to further support the reduction of Co-op’s net debt.”

Owned by millions of UK consumers, the Co-op operates over 2,500 food stores, over 800 funeral homes and provides products to over 5,000 other stores, including those run by independent co-operative societies and through its wholesale business, Nisa Retail Limited. 

Employing almost 60,000 people, the Co-op has an annual turnover of over £11 billion.

Blackburn-based billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital completed the £6.8 billion acquisition of a majority ownership stake in Asda from Walmart Inc. in 2021.

Walmart retains an equity investment in Asda, with an ongoing commercial relationship and a seat on the board.

Asda said in a statement: “The circa 2,300 colleagues currently employed by The Co-op will move to Asda’s employment under TUPE transfer in the coming months, following consultation with USDAW.

“Whilst the sale of the sites has now formally completed and Asda owns the 132 sites, the deal remains subject to regulatory approval from the CMA (Competition and Markets Authority).

“The CMA has issued an ‘Initial Enforcement Order’ requiring that the Co-Op sites remain entirely separate from Asda whilst the CMA conducts it investigation into the deal – a process that is expected to take until mid-2023.

“During that time the sites will be run separately to the Asda business and only following formal approval of the transaction will colleagues be able to transfer to Asda’s employment and the stores made part of the Asda estate.”

Asda co-owner Mohsin Issa said: “We are delighted to formally complete the transaction that we announced in August and taking the next step on our journey to creating a new and exciting part of our Asda business …

“We look forward to working collaboratively with the CMA on their investigation and to welcoming our new Asda colleagues to our great business in the coming months.”