Woolworths to spin off ALH hotel group and liquor business in de-merger
Woolworths will separate its supermarket retail business from its $11 billion liquor and hotel operations under a de-merger.
Woolworths’ ALH Hotel group is the single largest hotel operator in Australia, with 327 hotel restaurants and bistros ranging in size from 50 to 400 seat capacity. The partnership also owns 12,000 gaming machine licences, making it the third biggest Australian pokies operator behind the casino businesses, Crown and Star.
Under the plans, the supermarket giant will next year combine its drinks and hospitality businesses into a single de-merged entity, likely to be called Endeavour Group. Woolworths will then de-merge from Endeavour to concentrate on its retail supermarket operations.
Woolworths group chairman Gordon Cairns said the board believed that a merger of Endeavour Drinks and ALH followed by a separation, was in shareholders’ best interests.
“It reflects the board’s focus on maximising long-term shareholder value,” he said.
The merger of Endeavour Drinks and ALH will create Australia’s largest integrated food and drink and hospitality business with annual sales of about $10 billion.
“Over the past three years we have progressively moved from a period of fixing the basics as part of Woolworths’ turnaround to investing for the future as part of our transformation,” said Woolworths Group CEO Brad Banducci.
“As we look to build customer differentiation in all of our businesses, and prepare for an agile and digitally-enabled future, we have decided to simplify Woolworths Group through a combination and subsequent separation of Endeavour Group.”
The merger of Endeavour Drinks and ALH is expected to complete in the second half of 2019.
Sheridan Randall, 4th July 2019
