Metcash sells automotive division
Australian listed Burson Group, which owns the Burson Auto Parts brand, has agreed to buy the division, which includes the Autobarn, Autopro, ABS, and Midas brands.
Metcash announced it was looking to publicly float its automotive businesses in May to help improve its balance sheet and enable to to focus on its struggling grocery business.
“Through discussions with Burson, it became clear that the parties could reach an agreement which represented both attractive value for shareholders and certainty of transaction completion,” Ian Morrice, CEO, Metcash, said.
“While Metcash Automotive has performed well under our ownership, the sale makes sense for both Metcash and the automotive business,” Morrice said.
It comes as Metcash reported a $384 million full year loss after intense competition in the supermarket sector resulted in $640 million in writedowns.
The loss compares to a $169 million profit for 2013/14. But the group recorded underlying earnings before interest and tax of $325 million, which is at the upper end of the group’s $315 million and $330 million guidance range.
The sale of its automotive division is expected to be complete in July 2015.