The purchase involves the Co-operative’s existing farming operations, including:
The agreement adds a thriving farming business to the Wellcome Trust’s £16.5 billion endowment, which already includes property and agricultural land valued at £1.8 billion in September 2013. The Trust will develop and invest in the Farmcare business, while maintaining existing services such as the Co-operative’s pioneering "Farm to Fork education initiative.
Danny Truell, Chief Investment Officer of the Wellcome Trust, said: "The Wellcome Trust has a strong track record as a long-term investor which values responsible stewardship over quick profits, with extensive and successful UK interests in property and farmland. We believe that we are ideally placed to develop and grow the Co-operative Group’s farms and farm business while providing continuity, and we are delighted to have acquired them in what will be one of the largest global deals of its kind.
"The Trust’s philosophy is to provide long-term investment for the businesses and property we hold, in good times and in bad. We will take this approach to running Farmcare Trading Ltd as a going concern, giving a business that is already strong and successful the support and resources it needs to grow, to the benefit of employees, tenants, partners and local communities. Over the last 20 years, we have become one of the largest landlords in the UK as part of owning a globally diversified portfolio. We seek to be one of the most responsible."
Richard Pennycook, Interim Group Chief Executive of The Co-operative Group, said: "The successful sale of our Farms business is another important development for The Co-operative Group. The sale proceeds will enable us to further reduce our debt and progress with the delivery of the clear strategic plans we have in place for our core retail and consumer services’ divisions.
"In the Wellcome Trust we have a buyer whose values are closely aligned to those of The Co-operative. They have a proven track record in managing a sustainable investment portfolio, the proceeds of which are used to fund improvements in biomedical science and learning. The Wellcome Trust has acquired an excellent farming business characterised by the quality and professionalism of colleagues and high levels of customer service. I expect the farming business to continue to thrive under their committed long-term ownership."
The Wellcome Trust is the world's second highest-spending charitable foundation, dedicated to driving improvements in human and animal health. It spends more than £700 million a year on supporting bright minds in biomedical research, the humanities and the social sciences, and on public engagement and education in these fields.
The Trust's notable achievements include funding much of the sequencing of the human genetic code, and research that enabled the introduction of the frontline drugs used to fight malaria.
This work is supported by the Trust's £16.5 billion endowment, which has grown by 153% over the past decade. Its diverse global portfolio is managed by a professional team which is known for taking a long-term approach to investment, and for developing and growing its assets.
The Wellcome Trust’s property portfolio, valued at £1.8 billion in September 2013, includes a major estate in South Kensington, London, which has benefited from a significant investment programme since its acquistion in the mid-1990s. It has significant agricultural holdings, including in Hinxton in Cambridgeshire, Kings Langley in Hertfordshire, and Alpraham in Cheshire. The Trust recently acquired full ownership of iQ, a student accommodation company, from its joint venture partner, Quintain, for £106.4 million.
The Wellcome Trust was advised by Bidwells, PricewaterhouseCoopers and Mills & Reeve. The Co-operative Group was advised by Savills, Deloitte and Burges Salmon.
The Co-operative Group is the UK’s largest mutual business, whose purpose is "Championing a better way to do business for you and your communities." Owned by over eight million members, The Group operates a total of 4,500 outlets, with around 87,000 employees and has an annual turnover of £11 billion with interests across food, funerals, insurance and legal services.
The Wellcome Trust was established in 1936 in the will of Sir Henry Wellcome, a pharmaceutical pioneer, progressive industrialist, philanthropist and archaeologist. Since 1985 it has given away over £11 billion in pursuit of its charitable objectives.
Between 1936 and 1986, the Wellcome Trust was the sole owner of the Wellcome Foundation, Sir Henry Wellcome’s drug company. In 1986 the Trust began floating shares in the Wellcome Foundation, and used the proceeds to diversify its assets. The company was acquired by Glaxo in 1995 to create GlaxoWellcome, which went on to merge with SmithKline Beecham in 2000 to create GlaxoSmithKline. The Trust has no ongoing governance link with GSK, though it has acquired some shares in the company as part of its diverse investment portfolio.