SUPERMARKET chain Sainsbury's has sold its Homebase DIY chain to venture capitalist Schroder Ventures in a deal worth £969m.

The agreement sees Schroder pick up the existing Homebase business for £750m, while Sainsbury's will sell 28 sites that are not currently trading to Woolworths-to-B&Q rival Kingfisher for £219m.

Sainsbury's will also invest £31m in Homebase to retain an 18 per cent stake.

Sir Peter Davis, Sainsbury's group chief executive, said: "Our priority now is to focus on food retailing and to devote our management and financial resources to the profit recovery in our UK supermarket business and in becoming first choice for food shopping."

Sainsbury's also said Homebase managing director Kate Swann had left the business.

A number of freehold properties will be sold by the company over a period of time.

Completion of the sale is expected to take place in the first quarter of next year, subject to clearance by the European Commission.

Homebase has 283 stores around the country and employs 17,000 people.

Schroders partner Charles Sherwood, who led the negotiating team, stressed that the company did not expect to cut any jobs as part of this deal.

The group is looking to expand the business, focusing on developing larger format stores, of around 80,000 square feet, and concentrating on the "softer" home adornments and gardening market.

Homebase stores currently average about 35,000 square feet.

But the move would not mean Homebase going head-to-head with market leader B&Q, which specialises in larger, 100,000 square foot or bigger warehouse stores, Mr Sherwood said.

Schroders will now look to bring in a chief executive to replace Ms Swann, who is moving to catalogue retailer Argos.

In the meantime, it has appointed John Lovering, a retail specialist who chairs a number of companies, including retailer Peacocks, as chairman and interim chief executive.

Sainsbury's said in August that it was considering selling the business and admitted last month negotiations had taken longer than expected