The Coles Group Ltd (ASX: COL) share price is trading lower on Wednesday.
At the time of writing, the supermarket giant's shares are down 0.25% to $16.72.
Though, this is better than the ASX 200 index, which is down over 1% currently.
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What's going on with the Coles share price today?
The Coles share price is outperforming the ASX 200 on Wednesday after it announced a major divestment.
As we reported here earlier, Coles has entered into a binding agreement to sell its fuel and convenience retailing business to Viva Energy Group Ltd (ASX: VEA) for $300 million.
Once complete, the transaction will see Viva Energy own and operate the 710 Coles Express sites currently operated by Coles. In addition, the Fuel and Convenience Alliance between Coles and Viva Energy, which was due to end in 2029, will terminate upon completion.
These 710 Coles Express sites will be rebranded by Viva Energy over the next two years. However, the two parties have entered into a multi-year strategic partnership. This will mean that Coles and Coles Express customers continue to enjoy "the compelling customer offer and loyalty benefits they currently enjoy at Coles Express sites."
Though, it is worth noting that the deal is subject to customary closing conditions. This includes Viva Energy obtaining Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board (FIRB) approval. If all goes to plan, completion is expected to occur in the second half of FY 2023.
Why is Coles selling?
Coles's CEO Steven Cain revealed that selling the business will allow the company to focus on its supermarket and liquor businesses, as well as its ambition to become Australia's most sustainable supermarket company. He commented:
This agreement is positive not only for Coles and Viva Energy, but also for our customers, team members and respective shareholders. Viva is well-placed to make the most of opportunities to grow the Express business into the future, while we will strengthen our focus on our omnichannel supermarket and liquor businesses and our ambition of becoming Australia's most sustainable supermarket group.
Judging by the relative outperformance of the Coles share price today, it appears as though the market supports this transaction.
