Sainsbury’s is closing in on a deal to acquire convenience store operator Nisa for £130 million.
If the Nisa board recommends the offer, it would require the backing of at least 50% of Nisa’s shopkeeper members.
The more than 1,300 independent retailers, who operate around 3,000 stores around the country as part of the mutual organisation, would then have a vote on the future of the group. It is understood that the Sainsbury’s bid has been selected by the board over a previous offer by rival the Co-operative Group.
The business would complement Sainsbury’s chain of 800 convenience stores. In total the group has a turnover of £1.5 billion.
The deal follows on from Tesco’s acquisition of wholesaler Booker for £3.7 billion in January, creating one of the largest combined food businesses in the UK. Booker has around 5,400 stores as part of its network, which includes Premier, Londis and Budgens convenience stores.
Tesco said the deal, which is currently the subject of a competition investigation, would improve efficiencies and be an opportunity to work closer with its suppliers to strengthen its own-brand and fresh food ranges.
The retail landscape shifted further last week when online retailer Amazon purchased organic food specialist Whole Foods for $13.7 billion, causing Sainsbury’s and Tesco shares to fall by as much as 4%.
Head of corporate finance at LGB corporate finance, Angus Grierson, believes more acquisitions can be expected as the big supermarket brands aim to increase their retail space.
“The move to acquire Nisa is another strategic move for one of the key players in the sector after some substantial deals seen recently in the hyper competitive grocery market, including Amazon-Whole Foods and Tesco-Booker,” he said.
“With property scarcity playing a bigger role in grocer’s ability to expand, this move signals Sainsbury’s belief that consumers are increasingly moving to smaller, local stores rather than large supermarkets for increase ease and convenience.”
Nisa was formed in 1977 as Northern Independent Supermarkets Association. After losing £3 million in 2015, CEO Nick Read led a turnaround last year as the brand generated £7.3 million profit.
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