The Co-operative Group has sold its farms business to the Wellcome Trust for £249m as the company attempts to repair its battered image and its diminished bank balance.
The sale is the second disposal in the past month by Co-op, after it sold its pharmacy business to the cash-and-carry giant Bestway for £620m.
Chief executive Richard Pennycook said the deal would allow the mutual to continue paying off its debts and focus on its core food, funeral and insurance businesses.
He added: “In the Wellcome Trust we have a buyer whose values are closely aligned to those of the Co-operative. They have a proven track record in managing a sustainable investment portfolio, the proceeds of which are used to fund improvements in biomedical science and learning.”
The Wellcome Trust, one of the world’s largest charitable foundations with an endowment of £16.5bn, will now control nearly 40,000 acres of land across 15 farms.
The deal also includes more than 100 residential homes and 27 commercial properties. All 250 jobs will be saved.
Co-op is now expected to turn its attentions to selling its security services business, as part of plans to pay down the £1.4bn it owes to lenders following a £2.5bn loss in 2013.
There had been some concern that the farming business would be sold to an overseas buyer – concerns that had led to friction with Co-op members already smarting with seeing “vulture funds” take control of its stricken bank.
But Danny Truell, chief investment officer of Wellcome Trust, insisted it “has a strong track record as a long-term investor which values responsible stewardship over quick profits, with extensive and successful interests in UK property and farmland”.
The trust is best known for investing in pharmaceuticals and health research.Reuse content