Co-op sells farms for £249m
THE Wellcome Trust has agreed to buy the Co-op Group’s farms business, some of which are based in Yorkshire, for £249m.
It follows last month’s sale of the 700-strong pharmacy chain to wholesaler Bestway for £620m.
The Co-op has been looking for buyers since the start of the year to help pay off debts after the near collapse of the Co-op Bank and a £2.5bn annual loss in what it described as a “disastrous” year.
The farms business – which comprises 15 large farms in Yorkshire, Lincolnshire and East Anglia – grows some produce for the retail operation, but mostly produces cereal sold on the general market. The deal includes nearly 40,000 acres, 100 houses and 27 commercial properties.
Co-op said it was pleased to have found a buyer that will, “continue to invest in and develop” the farms while “maintaining existing services for local communities, such as the pioneering educational programme for children – ‘Farm to Fork'”. All staff will transfer with immediate effect.
The Wellcome Trust is a charitable foundation dedicated to improving human and animal health. It owns property valued at £1.8bn including agricultural holdings in Alpraham, Cheshire, and in Cambridgeshire and Hertfordshire.
Co-op interim chief executive Richard Pennycook said: “The successful sale of our farms business is another important development for The Co-operative Group. The sale proceeds will enable us to further reduce our debt and progress with the delivery of the clear strategic plans we have in place for our core retail and consumer services’ divisions.
“In the Wellcome Trust we have a buyer whose values are closely aligned to those of The Co-operative. They have a proven track record in managing a sustainable investment portfolio, the proceeds of which are used to fund improvements in biomedical science and learning. The Wellcome Trust has
acquired an excellent farming business characterised by the quality and professionalism of colleagues and high levels of customer service. I expect the farming business to continue to thrive under their committed long-term ownership.”
Michael Aubrey, head of agriculture at Mills & Reeve, led the firm’s 40-strong team on the acquisition.
He said: “This was a once in a lifetime opportunity for the Wellcome Trust to acquire an agricultural portfolio of this scale. The Wellcome Trust has a strong track record as a long-term investor that values responsible stewardship over quick profits, with extensive and successful interests in UK property and farmland. It is ideally placed to develop and grow the Co-operative Group’s farms and businesses while providing continuity. We are delighted to have acted for the Wellcome Trust in one of the largest global deals of its kind.”
