Shares of Woolworths Group Limited (ASX: WOW) rose around 1% on Wednesday to hit a 5-month high after paying A$552 million ($399.4 million) for a 65% stake in PFD Food Services, a major food distributor, and its properties.
Woolworths, Australia’s largest chain of supermarkets and grocery stores, agreed to pay A$302 million for a 65% stake of PFD, in addition to A$249 million for 26 freehold properties.
“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,” Woolworths Group CEO Brad Banducci said.
Woolworths decided to go a step further and acquire a controlling stake in PFD after striking a partnership agreement with the food distributor during the lockdown in April. On the other hand, PFD will gain access to Woolworths’ unparalleled supply chain network and e-commerce platforms.
Under the terms of the agreement, there’s a three-year put and call options for the remaining 35% of PFD.
Woolworths share price gained around 1% to trade at A$40.79 for the first time since March.