On 3 July 2019, Woolworths Group (Australia) announced the combination of its Endeavour Drinks retail business (including BWS and Dan Murphy’s retail outlets) and its ALH hotels, pokie machines and other hospitality assets.
The merged businesses will operate as the “Endeavour Group”. In 2020, this combined business is expected to be completely separated and spun off from Woolworths.
Endeavour Group is also expected to have more than 1500 BWS and Dan Murphy’s retailer drink outlets, and approximately 327 ALH hotels and pubs.
The merger into the Endeavour Group will create Australia’s biggest drinks and hospitality entity with estimated sales of approximately $10 billion and a $1 billion earnings before interest, taxes, deprecation and amortisation.
Bruce Mathieson Group (BMG), which has enjoyed a long and successful role as the junior partner with Woolworths as the larger partner in ALH since 2004, will swap its 25% stake in ALH for a 14.6% interest in the separated Endeavour Group.
“Over the past three years we have progressively moved from a period of fixing the basics as part of our turnaround to investing for the future as part of our transformation,” Woolies’ CEO, Brad Banducci said.
“As we look to build customer differentiation in all of our businesses, and prepare for an agile and digitally-enabled future, we have decided to simplify Woolworths Group through a combination and subsequent separation of Endeavour Group”, he added.
Woolworths group, in its announcement to the ASX, described the main benefits of separation as:
Commentators have also attributed the separation of Poka machines into a different business outside Woolworths to the growing pressures from consumers and investors on Woolworths in relation to its corporate social responsibilities.