Wesfarmers Limited (ASX:WES) announced the spin-off of 80% stakes in Coles Group Limited on March 15, 2018. The transaction will be effected by way of a scheme of arrangement, under which eligible shareholders will receive one Coles share for every Wesfarmers share held on the applicable record date. Wesfarmers proposes to retain a minority ownership interest of up to 20% in Coles. As of As of July 23, 2018, Wesfarmers Limited will retain a minority ownership interest of 15% in Coles. Following the transaction, Coles to be demerged into a separate Australian Securities Exchange listed company. For the year ending on December 31, 2017, Coles Group reported revenue of AUD 39.2 billion and EBIT of AUD 1.6 billion. James Graham AM will be appointed Chairman of Coles upon completion and has stepped down as a non-executive director of Wesfarmers. The other non-executive directors proposed are David Cheesewright, Jacqueline Chow and Richard Freudenstein. Archie Norman will step down as Deputy Chairman of Coles and advisor to the Wesfarmers Board to become an advisor to the new Coles' Board.

The demerger is subject to final Board approval, third party consents, and regulatory, court and shareholder approvals. A meeting of the shareholders of Coles to consider and vote on the transaction will be held in November 2018. As of October 5, 2018, the Supreme Court of Western Australia ordered a meeting of Wesfarmers' shareholders be convened to vote on the transaction, which will be held on November 15, 2018. The Board of Wesfarmers unanimously recommended the shareholders to vote in favour of the transaction. If approved, the demerger would be expected to be completed in the 2019 financial year. The deal is approved by shareholders of Wesfarmers Limited. As of July 23, 2018, the transaction is expected to be completed in late November 2018. As of November 15, 2018, if the scheme is approved by the Court, Wesfarmers proposes to lodge a copy of the orders made by the Court with the Australian Securities and Investments Commission on November 20, 2018 and the Scheme will become effective on that date. As of November 19, 2018, the transaction was approved by Supreme Court of Western Australia. Consequently, Coles' shares will start trading on a deferred settlement basis on November 21, 2018. The transaction would be value accretive. Gresham Partners Limited, Macquarie Capital and The Goldman Sachs Group, Inc. acted as financial advisors to Wesfarmers. Baden Furphy and Al Donald of Herbert Smith Freehills acted as legal advisors to Wesfarmers. Grant Samuel acted as independent expert for Wesfarmers.