Bestway To Buy Co-op Pharmacy Arm For £620m
The embattled Co-operative Group has agreed to sell its pharmacy division to Bestway for £620m.
In a statement, the Co-op said the sale would be completed in October, following the successful separation of the division from the parent group.
The sale proceeds would be used to help reduce group debt and plug a capital black hole of more than £1.5bn.
Sky News City Editor Mark Kleinman revealed last March that the Co-op was lining up City advisors for the pharmacy sale, at the time estimated to be around £600m.
As the Co-op attempted to rein in its massive debt a decision was taken to sell the profitable pharmacy section, with the proceeds injected into its retail and consumer services division.
As part of the deal the Co-op said it would provide transitional assistance for up to 18 months and would include branding continuation for up to a year.
Bestway is the UK's 18th largest privately owned company and seventh biggest family-owned business.
Co-op Group interim group chief executive Richard Pennycook said: "The successful sale of our pharmacy business is an important move for (the group).
"The proceeds will enable The Co-operative to reduce debt and invest in our business and is part of the focused delivery of our clear strategic plans and priorities.
"I am pleased that the agreement we have reached with Bestway reflects the quality of the business and the high level of interest from a number of bidders."
With this acquisition, Bestway will have an annual turnover of approximately £3.4bn and a global workforce of more than 32,600 people, with nearly 12,000 people in the UK.
It owns the UK's second largest independent wholesaler serving 125,000 independent retailers and caterers, from 64 warehouses nationwide.
It also operates Pakistan's second largest cement manufacturer, with an annual capacity of six million tonnes.
Bestway group chief executive Zameer Choudrey said: "We are delighted to be bringing The Co-operative pharmacy business into the Bestway family, adding to our growing and diverse business portfolio.
"In line with our own ethos, there is a strong focus on supporting and servicing the needs of the local communities within this business."