Sainsbury's is buying 10 leasehold stores from HHGL that are trading as DIY chain Homebase, for conversion into Sainsbury's supermarkets.
The supermarket giant said in a stock market filing that the transaction is expected to complete in early September.
It said the stores are in key target locations to increase Sainsbury's supermarket coverage across England, Northern Ireland and Scotland.
Once converted, the shop floor area of the stores will range from approximately 15,000 to 40,000 square feet and will add a total of around 235,000 square feet to its trading space. Sainsbury's says the acquisitions mean nearly 400,000 more people will be within a 10-minute drive of a Sainsbury's supermarket and the stores will showcase its latest food offer.
It aims to open the first of the stores next summer and aims to complete the conversion of all sites by the end of calendar year 2025. The gross investment value of the acquisition, or the total capitalised cost of leases, acquisition premium and fit-out costs, is expected to be approximately £130 million, the group said.
The Homebase stores Sainsbury's is acquiring are: Homebase Birmingham Sutton Coldfield; Homebase Bromsgrove; Homebase Cromer; Homebase Derry/Londonderry; Homebase Fareham; Homebase Inverurie; Homebase Lowestoft; Homebase Newark; Homebase Omagh; and Homebase Rugby.
Sainsbury's said the conversion of the sites into supermarkets is expected to create approximately 1,000 Sainsbury's roles. It said it will guarantee an interview for any Homebase colleagues who are placed at risk of redundancy as a result of this transaction.
Simon Roberts, Chief Executive Officer, J Sainsbury, said in a statement: "Sainsbury's food business continues to go from strength to strength as we push ahead with our Next Level Sainsbury's plan. We have the best combination of value and quality in the market and that's winning us customers from all our key competitors and driving consistent growth in volume market share. We want to build on this momentum which is why we are growing our supermarket footprint."
British home improvement chain Homebase was founded by Sainsbury's and GB-Inno-BM in 1979 and was owned by Home Retail Group from October 2006, until it was sold to the Australian conglomerate Wesfarmers in January 2016. Wesfarmers rebranded the group as Bunnings. Subsequently, restructuring group Hilco bought it for £1, changed back the name of the stores and announced it would close 42 stores through a company voluntary arrangement.
Most recently Wilko and The Range owner Norton Group has been linked to a takeover bid for the chain.