Musgrave Group agrees sale of Budgens and Londis to Booker
21 May 2015
Musgrave has announced that it will sell its business in the UK which operates the Budgens and Londis brands to Booker for €57 million (£40 million) on a cash free-debt free basis. Completion of the transaction is subject to CMA approval. Budgens and Londis combined have almost 1,800 stores across the UK.
Chris Martin, CEO of Musgrave Group explained the move by outlining the fact that the grocery market in Great Britain is experiencing fundamental and permanent structural change, with intense competition and a deflationary environment. He said: “Given these challenging market dynamics, we carefully evaluated all of the possible options for our GB business. Having received a proposal from Booker, we concluded that a sale to Booker is the right thing for the group and would be the most advantageous outcome for our retailers, colleagues and suppliers in Great Britain. The agreement also includes the development of a strategic partnership with Booker.”
Booker already owns the Premier retail brand in Britain, which has more than 2,900 stores, and the budget Family Shopper brand.
“Booker will be a good fit for retailers and will continue to develop the Budgens and Londis brands utilising the supporting supply chain and head office. Retailers will benefit from Booker’s buying strength, an extensive operational footprint throughout Great Britain including a nationwide distribution and cash and carry infrastructure and a service culture that is proven to meet the needs of independent retailers.”
Martin explained how Musgrave GB has been a loss-making business so the sale will allow the group further develop the business in Ireland and Spain. “While the decision to sell Budgens and Londis is difficult, it will allow the group to drive forward with its growth strategy which is about developing our market-leading retail, convenience and cash and carry brands in the Republic of Ireland, Northern Ireland and Spain.
“We see the opportunity for growth in the improving Irish economy. To support our growth agenda, Musgrave is developing a strategic partnership with Booker. We will explore opportunities to collaborate on store formats, digital innovation, buying opportunities, sharing of best practice and to achieve cost savings and efficiencies for the business.”