This afternoon Wesfarmers Ltd (ASX: WES) announced that Coles plans to invest in automation and that a vote is necessary before Coles can be de-merged.
Wesfarmers is one of Australia’s giant retail conglomerates, it operates Bunnings, Kmart, Target, Officeworks and currently Coles.
De-Merger News:
Wesfarmers announced that the Supreme Court of Western Australia requires a meeting and vote of Wesfarmers shareholders to approve the de-merger before it can go ahead.
If the de-merger goes ahead, eligible Wesfarmers shareholders will receive one Coles share for every Wesfarmers share they own.
Wesfarmers Chairman Michael Chaney said: “Demerging Coles enhances Wesfarmers’ prospects of delivering satisfactory returns to shareholders by shifting our investment weighting and focus towards businesses with higher future earnings growth prospects.”
The de-merger is planned to be completed by the end of November 2018.
Automation investment:
Coles is investing in two automated distribution centres over the next five years.
According to the announcement, the automation provider – Witron Logistic + Informatik GmbH – is a world leader of ‘dynamic warehouse and order picking systems for distribution centres’.
The investment forms part of the Coles net capital expenditure guidance of $600 million to $800 million in FY19.
Coles Managing Director Steven Cain said: “The investment we are making in this technology is expected to deliver lower supply chain costs, provide safer working environments and enhance our business competitiveness.”
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