Woolies to ditch pokies, liquor
SUPERMARKET giant Woolworths is going to combine its liquor and hospitality businesses before divesting them in the next financial year.
Woolies will merge Endeavour Drinks, which includes Dan Murphy's and BWS, with the hotels and gaming-focused ALH Group by the end of the calendar year to create a stand-alone business called Endeavour Group.
"Following the combination, Woolworths Group intends to pursue a separation of the business through a demerger or other value-accretive alternative … in calendar year 2020," the company said on Wednesday.
Woolworths did not say whether it plans to sell or list the new business, although it does expect to retain a minority shareholding whichever route it takes.
Wesfarmers pursued the latter option when it divested supermarket chain Coles last year, retaining a 15 per cent stake as Woolworths' fierce rival listed on the ASX.
Woolworths, which has already offloaded its petrol business, said the separation will create a simplified structure and a greater focus on its core food and everyday needs markets.
"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," Woolworths chairman Gordon Cairns said.
Endeavour Drinks and ALH together were responsible for more than 30 per cent of Woolworths' earnings in the last financial year, with Endeavour Drinks the group's second-largest contributor after Australian supermarkets in terms of both sales and earnings.
The integrated Endeavour Group will comprise of more than 1500 BWS and Dan Murphy's retail drinks outlets and 327 ALH hotels and neighbourhood pubs.
Other businesses to be included in the merger include Endeavour Drinks' own and exclusive brands business, Pinnacle Drinks; Langton's, a fine wine auction and retail business; Cellarmasters, a wine subscription business; and an 8.7 per cent stake in ALE Property Group.
Bruce Mathieson Group, the junior partner in the ALH joint venture that includes hotels and pokies, will swap its 25 per cent stake for a 14.6 per cent interest in the new Endeavour Group.