Wesfarmers to spin off supermarket giant Coles

Australian supermarket chain Coles will be spun off into a separate entity by owner Wesfarmers, the company said Friday, amid a shake-up in the food retail sector as new entrants threaten a longstanding duopoly. Coles, which together with rival Woolworths is one of Australia's two main supermarket giants, will become one of the nation's 30 biggest listed firms after the demerger, conglomerate Wesfarmers said.
Coles currently gobbles up 60 percent of Wesfarmers' capital, but only contributes 34 percent of its earnings. The spin-off decision was taken after a review of the entire business, Wesfarmers said. "We believe Coles has developed strong investment fundamentals and is of a scale where it should be operated and owned separately," Wesfarmers managing director Rob Scott said in a statement.