Asda acquired by billionaire brothers for £6.8bn

Latest News | Mergers & Acquisitions | Retail

Two Lancashire-based billionaire brothers, Zuber and Mohsin Issa, have today acquired supermarket giant Asda from Walmart, in a deal worth £6.8bn.

The pair own the EG Group – which operates more than 5,000 petrol stations across the UK and Europe.

The Issa brothers, alongside their consortium partners, private equity firm TDR Capital will take a majority stake in Asda. The brothers already have an ongoing relationship with Asda through its petrol forecourt business.

TDR Capital now owns 50% of Asda, with Zuber Issa controlling 25% and Mohsin Issa the remaining 25%.

Walmart will retain on ongoing equity investment in Asda.

This will be the first time in 21 years that Asda will be under British ownership.

The auction process for Asda has lasted for several months after US-based Walmart decided to sell its controlling stake in the company.

Last year, the Competition and Markets Authority (CMA) blocked a £7.3bn merger between Sainsbury’s and Asda

Following the completion of the deal, Asda will keep its headquarters in Leeds and its CEO, Roger Burnley, will remain in his role.

A statement from the consortium read: “We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy.”

Industry reaction

Andrew Taylor, co-founder at Aldwych Partners said: “Petrol prices have a big impact on UK households. The CMA will want to be sure that the tie up between Asda and Euro Garages doesn’t result in a less competitive market in fuel retailing. Past deals in the sector have only required the sale of a few forecourts to satisfy the CMA, but much will depend on the extent of the overlap between the Asda and EG networks.”

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