Sainsbury's buys Co-op stores for £83m

Sainsbury’s has bought 22 Somerfield branded stores and two Co-op branded stores with a total net selling area of 236,000 sq ft.

The deal includes 13 freehold and long leasehold stores and the deal totals £83m.

Sainsbury’s will also pay a further £45m for fit-out costs.

The deal will be funded from its existing cash resources and facilities.

Justin King, chief executive at Sainsbury’s, said: 'We are delighted to acquire these stores which are an excellent addition to our store estate and we are pleased to welcome 1,400 new colleagues to Sainsbury's.'

Completion of the deal is conditional on the Office of Fair Trading approvals.

The sale to Sainsbury’s is part of Co-op’s sell off of stores as part of its deal to buy Somerfield. The OFT ruled it would have to sell 126 stores to allow the transaction to complete.

Co-op completed the £1.6bn acquisition of the Somerfield supermarket chain last week.

The deal gives Co-op an 8% market share of the UK grocery sector. It now has more than 3,000 stores generating annual sales in excess of £7bn.

In the last two months Co-op has completed the sale of 38 stores to Morrisons and 13 stores to Waitrose, as reported in Property Week (12 December). Tesco is also thought to be taking 15 stores.

Sainsbury’s new stores will be opened in the first half of 2009/10 and 19 stores will form part of the supermarket estate, adding 216,000 sq ft, with five stores becoming Sainsbury's Locals, adding 20,000 sq ft. The stores total six in its targetted growth area of Scotland, three in the north of England, three in Wales, two in the Midlands, six in the south east and east of England and four in the south west.