Supermarket giant Coles is eyeing off a potential acquisition of Australia’s largest pet care company.
Greencross Pet Wellness Company owns 267 retail stores across Australia and New Zealand, including Petbarn and City Farmers.
Supermarket giant Coles is eyeing off a potential acquisition of Australia’s largest pet care company. Getty
Coles confirmed it has been in discussions with parent company TPG Capital about its potential acquisition of the business.
“As one of Australia’s leading retailers, with a strong balance sheet and debt capacity, Coles regularly assesses strategic opportunities that may complement its existing business and create value for shareholders,” the company said in a statement to the ASX.
“Coles will only pursue an acquisition where it is satisfied that the transaction is strategically compelling and capable of delivering attractive shareholder returns.
“Discussions remain incomplete and there is no certainty that a transaction will proceed.
“Coles will continue to keep the market informed in accordance with its continuous disclosure obligations.”
According to the Australian Financial Review, the supermarket giant approached TPG almost a year ago.
The newspaper reported while the sale price was unclear, TPG is understood to be targeting about $4 billion, the valuation at which it was looking to float the company last year.
Coles has been contacted for further comment.
Outside of retail, Greencross owns more than 140 vet clinics and 24 animal hospitals.
The pet care company also owns 132 grooming salons, 114 puppy schools, four crematorium facilities, 166 DIY dog washes, 15 mobile dog washes and a specialist pathology centre which services veterinary clinics nationally.
Coles’ shares fell about 5 per cent following the news, although the merger talks weren’t the only major development involving the supermarket giant on Wednesday.
Coles CEO Leah Weckert. The supermarket giant’s share price slid on Wednesday. Dion Georgopoulos/AFR
Coles had been planning to launch a new supermarket and liquor store in Kalgoorlie, in Western Australia, however the move was on Wednesday blocked by the competition watchdog.
The Australian Competition and Consumer Commission (ACCC) said Coles’ entry into the market would lead to independent stores closing up, leading to less competition for local customers.
“Independent supermarkets are an important competitive constraint on the major supermarket chains,” ACCC deputy chair Mick Keogh said.
“They provide consumers with meaningful choice, competition on service, quality and range, and competition on price for some products.
“We found that while a new Coles supermarket will offer benefits to some consumers, there is a real prospect that the acquisition would lead to the exit of an effective independent competitor, and its assets leaving the market.
“New entry would not be timely enough and sufficient to offset the loss of competition likely to result from the acquisition.
“Based on our assessment of all of the material before us, we are satisfied that there is a real commercial likelihood that Coles’ proposed acquisition would substantially lessen competition in Kalgoorlie in the longer-term, to the overall detriment of consumers.”