The MAJOR change coming to Woolworths: Supermarket set to sell liquor and gaming business
- Woolworths is going to blend the liquor and hospitality sides of their company
- Endeavour Drinks, including BWS and Dan Murphy’s, will merge with ALH Group
- After they’ve combined, Woollies will separate the business through a demerger
- Woollies then have a simpler structure so they can focus on core food needs
Woolworths announced a major shake-up on Wednesday, unveiling plans to offload its liquor stores and gaming businesses.
The supermarket said it will merge it Endeavour Drinks, which houses Dan Murphy’s and BWS, and ALH Group, the country’s biggest pokie operator.
By the end of the year, the two companies will have combined to become the new ‘Endeavour Group’.
Woolthworths will then remove itself from the merged company by listing it on the stock market.
Chairman Gordon Cairns said the merger will benefit customers and team members of both groups.
‘The Board believes that a merger of Endeavour Drinks and ALH followed by a separation, is in shareholders’ best interests,’ he said.
Woolworths is going to blend the liquor and hospitality sides of their business in the next financial year
‘This transaction is the natural evolution of the partnership and will allow Endeavour Drinks and ALH to reach their full potential,’ the statement read.
The supermarket giant said the separation will allow them to benefit from a a simpler organisational structure so they can focus on food and everyday needs of the company.
‘Following the combination, Woolworths Group intends to pursue a separation of the business through a demerger or other value-accretive alternative,’ Woolworths said in a statement.
This demerger is set to happen sometime next year.
The merger of Endeavour Drinks and ALH will create Australia’s largest integrated drinks and hospitality business.
It’s expected to bring in sales of approximately $10 billion, and $1 billion in earnings before interest, taxes and depreciation.
Woolworths chairman Gordon Cairns said the merger will benefit customers and team members of both groups
Endeavour Group will be made up of more than 1,500 BWS and Dan Murphy’s stores and 327 ALH hotels.
ALH retail drinks stores currently make up around one-in-three of Woollies retail drinks sales, with 86 Dan Murphy’s and 512 BWS stores owned by ALH at the end of March 2019.
However it’s unlikely to keep a minority shareholding no matter which road they go down.