Woolworths to merge and separate drinks and hospitality business
Sydney based Australia and New Zealand retail giant Woolworths Group has announced its intention to merge its drinks and hospitality businesses and then separate them from the business.
The move comes amidst controversy over the role of poker machines and gambling in large Australian retailers. Woolworths said the separation would provide it with a simplified structure, allowing it to focus on its core business.
Endeavour Drinks and hospitality business ALH Group are to be merged into a single entity known as Endeavour Group Limited, with that business expected to be demerged in 2020.
Woolworths Group Chairman, Gordon Cairns, said: “The Board believes that a merger of Endeavour Drinks and ALH followed by a separation, is in shareholders’ best interests and will benefit customers and team members of both groups. The decision has been taken after consideration of the future prospects of both businesses and how they can be best realised. It reflects the Board’s focus on maximising long-term shareholder value.”
“Over the past three years we have progressively moved from a period of fixing the basics as part of our 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.”
As reported in the Guardian, Woolworths shares increased by over 1%, reaching AU$34.02. Woolworths is listed on the ASX under the symbol “WOW”.