BENEFITS OF DEMERGING FOR WESFARMERS AND SHAREHOLDERS

-More financial flexibility

-More management accountability

-Better focus

-Can focus on core business offerings eg Bunnings, Officeworks etc

-Coles can focus on its own core distributions eg liquor, stores, convenience separate from Wesfarmers brand.

-Tax distribution for shareholders (additional shares for Wesfarmers shareholders, getting shares from both companies)

1. Shareholder flexibility

2. Investment in retail sector

3. Brand clarity - making it easier for users to recognise Coles identity

   
   

   
   

• Shareholders have the flexibility to choose how they invest in Wesfarmers

• Growth opportunities

• More opportunity to acquire smaller companies

• Coles receives more freedom

• Expansions and investments in other businesses

• More flexibility

• Shareholders can own shares in both Westfarmers and Coles generating greater returns on investments

• Westfarmers and Coles can focus on its core business separately

Splitting a company can allow companies to focus more on their own projects

Shareholders are free to choose stock holdings

Reduces holding risk for shareholders

Allows wesfarmers to focus on capital allocation

·       The demerger will allow Wesfarmers and Coles to focus on their core businesses

·       Wesfarmers can pursue growth opportunities which have a greater impact on returns to shareholders

·       enhanced investor focus on Wesfarmers’ remaining businesses and Coles as a standalone business.

For Shareholders

Wesfarmers shareholders have the flexibility to choose levels of holding Wesfarmers shares and/or Coles shares with different investment characteristics

1. Wesfarmers could concentrate on its key segments like Bunnings and Kmart.

2. Shareholders received direct Coles shares, enhancing value.

3. Freed resources allowed Wesfarmers to invest in higher-growth areas.

4. Shareholders gained exposure to both Wesfarmers’ growth and Coles’ stability.

5. Both companies could operate independently, improving decision-making.