Metcash Trading Limited (ASX:MTD) announced it would take ownership of 77 Franklins stores in NSW in a deal worth $215M.
The acquisition is expected to add more than $500M of annual wholesale sales to the Metcash business.
Metcash proposes to sell the stores to independent IGA retailers, but will operate the stores in the period preceding the sale.
Chief Executive, Mr Andrew Reitzer focused on the benefits it would provide to consumers, saying that “The IGA network will significantly improve its competitive position against the national chains in Australia’s largest grocery market, NSW”.
Metcash shares were trading up 15c at $4.34 at midday. Woolworths (ASX:WOW) shares were down 30c to $26.72