The Woolworths Group Ltd (ASX: WOW) share price will be on watch this morning.
This follows a positive development today in relation to a proposed investment.
What is happening?
This morning the retail conglomerate revealed that the Australian Competition and Consumer Commission (ACCC) has completed its review of the proposed acquisition of PFD Food Services.
PFD Food Services is one of Australia’s leading food service suppliers, which Woolworths is aiming to acquire a 65% stake in for a total consideration of $552 million.
The good news is that the ACCC has revealed that it will not oppose its strategic investment in PFD Food Services. As a result, Woolworths expects to complete its investment by the end of June.
Woolworths CEO, Brad Banducci, was pleased with the news.
He said: “We’re pleased to have approval to invest alongside the Smith family in PFD Food Services. They are a great Australian success story and a well respected business with both suppliers and customers in the food service industry. This investment is a logical adjacency for Woolworths Group and further supports the evolution of the Group into a Food and Everyday Needs Ecosystem.”
Upon its initial announcement last year, Mr Banducci revealed that the deal is expected to unlock synergies and support its growth.
“The investment will also unlock synergies for both businesses across the combined network and fleet. We will help to support PFD’s growth through access to our logistics, digital and data analytics and operational capabilities. For Woolworths Group, it will enhance store range localisation and provide fleet synergies through better route and capacity optimisation across our combined network,” he explained
Despite the investment, PFD Food Services will continue to operate independently and be led by its CEO Kerry Smith. A separate board and governance structure will now be implemented.
PFD Food Services CEO, Kerry Smith, commented: “At PFD, we pride ourselves on the strength of our customer and supplier relationships and that will remain unchanged as a result of this investment. We look forward to continuing to drive innovation in the industry and serving the evolving needs of our customers, suppliers and the broader community.”