McColl’s has agreed a deal to acquire 298 convenience stores from the Co-operative Group for £117m in cash, it revealed today. 

Jonathan Miller, McColl’s chief executive, branded the deal “transformational” for the group, which currently operates around 933 McColl’s-branded convenience stores in the UK.

Miller, who was appointed the chain’s boss in March, added: “These stores are profitable, well invested, and the perfect size for our operating model. We expect the transaction to be significantly earnings enhancing for our shareholders.”

The move, McColl’s said, fitted with its long-term strategy of “continuing to expand its convenience retail operations”. 

The Co-op Group has been reshaping its business since the crisis that hit it three years ago and last month started a rebranding process for its retail business.

The 298 stores represents around 10% of its total estate of 3,000 properties as it aims to focus on higher-growth convenience opportunities.

The stores have an average size of 1,727 sq. ft, with 116 freehold, 172 leasehold and 10 mixed freehold/leasehold. Around 3,800 staff are employed across the stores.

The deal, which was first rumoured last month, needs approval from the competition authorities but the initial acquisition is expected to be completed by January next year.

McColl’s, which also operates 434 newsagents primarily under the Martin’s fascia, said it will help fund the acquisition through the placing of 10,460,732 shares, which is expected to raise around £13.1m.