Bestway Group, the U.K. retailer and cement group controlled by Anwar Pervez, agreed to buy Co-Operative Group Ltd.’s pharmacy business for 620 million pounds ($1.1 billion), the latest step in the British mutual company’s road to recovery.
The price excludes cash and debt, and the purchase is expected to be completed in October, Bestway said today in a statement. The acquisition will increase its annual sales to about 3.4 billion pounds, the company said. Bestway had submitted the highest bid in the sale and was entering exclusive talks, three people with knowledge of the matter said earlier this month.
“We see great potential to grow the business organically and through future acquisitions,” Zameer M. Choudrey, Bestway Group’s chief executive officer, said in the statement.
Co-Op Group, whose businesses range from supermarkets to funeral parlors, is selling the pharmacies as part of a turnaround plan following losses of 2.5 billion pounds in 2013, predominantly in its banking unit. The Manchester, England-based company was forced to give up control of the bank last year to help plug a 1.5 billion-pound capital shortfall at the division. Paul Flowers, the former chairman of the bank, was charged in April with possession of cocaine, crystal meth and ketamine.
The sale of the pharmacy chain, which has 774 branches across the U.K., “is an important move” and will enable the Co-Op Group to reduce debt and invest in the business, interim group CEO Richard Pennycook said in the statement.