Following a month of exclusive talks, the UK's largest consumer co-operative, the Co-op Group has launched its bid to acquire the member-owned retail and wholesale group Nisa.
The deal puts the value of Nisa's full shareholding at £137.5m which, with associated costs of £5.5m, will result in a total payment of £143m by the Co-op. If successful, this acquisition will establish the Co-op as a significant wholesaler to independent convenience retailers; enabling it to supply 3,200 independent stores alongside its company-managed portfolio of some 2,500 stores.
Unanimously recommended by the Nisa board
The Nisa board has announced that it was unanimous in its decision to recommend the offer to the retail members. However, its acceptance is dependent on a vote by the retailer-owners, which will take place in early November. In the meantime Nisa will be holding a series of regional events in partnership with the Co-op to present the deal to members in detail. Owing to the scale of the transaction the deal will also necessarily have to be approved by the Competition and Markets Authority.
Nisa to be retained as a standalone business and brand
While keys benefits to Nisa will be access to the stronger ranges of the Co-op organisation, including its full private label offer, the Co-op has signalled that it intends that Nisa will continue to operate as a separate business, focused on supporting the strengths of its independent retailer members. The joint announcement has specified that the Co-op will respect key aspects of Nisa members' independence 'to fully source the range that best suits their stores, and to operate those stores how they want.' But retailers will also have the opportunity to become Co-op franchisees should they choose.
Staggered payments to retain Nisa retailer loyalty
In order to retain members in the aftermath of the completion of the deal the share pay-out to Nisa retailers will be spread over three years, supplemented by additional rebates payable over four years.
Peter Hartley, Chairman, Nisa Retail commented:
'Nisa has made significant strides in recent years, we firmly believe that the combination with the Co-op is in the best interests of our members. The Co-op offers the right blend of buying capability, convenience expertise and respect for the heritage of our business.'
Jo Whitfield, Food CEO, the Co-op Group said:
'This acquisition provides the opportunity to create an even greater and more compelling member-led presence within the UK convenience sector. Co-op and Nisa have achieved so much on their own to support local communities, but together I believe we can go from strength to strength.'