Metcash strikes $215 million deal to take over 85 Franklins supermarkets in NSW
July 1, 2010
Independent grocery and liquor wholesaler Metcash will take over 85 Franklins supermarkets in NSW in a $215 million deal.
The takeover involves 77 corporate stores plus supply to eight franchised stores and is expected to be finalised by September 30 this year.
Once the deal is completed, Metcash says it plans to sell the stores to IGA retailers. It expects the acquisition to add more than $500 million annually of wholesale sales.
“Metcash will operate the stores in the intervening period whilst the store sale program is completed, which could take several months,” it says in a statement.
Metcash Chief Executive Andrew Reitzer says the purchase will boost competition in the grocery sector and grow Metcash’s market share in NSW from 11 to 17 percent.
“These stores will be able to take advantage of our favourable arrangements with suppliers to achieve more competitive pricing deals. Consumers and independent retailers in NSW are big winners from this deal,” Reitzer says.
The transaction will be scrutinised by the competition watchdog, the Australian Competition and Consumer Commission.