Asda owners to sell 27 forecourts to smooth competition concerns

The Issa brothers and TDR Capital said the Competition and Markets Authority (CMA) had indicated that their offer to sell 27 of EG Group’s petrol forecourts would pave the way for it to purchase Asda’s petrol station portfolio without further investigation. 

The competition watchdog raised concerns last month that the acquisition could spark increased fuel prices for consumers in areas where the Issas’ EG Group also operated a petrol station. The CMA said at the time consumers could be affected by price increases in 37 areas of the UK. 

However, the CMA said on Wednesday that selling the 27 stations would give “reasonable grounds” that the deal “might be accpeted by the CMA” without the need for an escalated, phase 2 inquiry. 

In a joint statement, the Issa brothers and TDR said: “Over the course of the past 10 days, we have been working constructively with the CMA to offer remedies to address the CMA’s competition concerns. Today, we are pleased to confirm that the CMA has indicated it has reasonable grounds to believe the proposed remedies are acceptable, enabling us to arrive at a conclusive outcome for the acquisition of Asda in phase 1.

“As is usual in cases such as these, the CMA now has a period of 40 days to work through the detail of the proposed divestitures and therefore we are restricted in the level of information we are able to provide on specific sites. However, we have been comforted by the significant interest we have already received from potential buyers during this process, demonstrating the strong growth potential of our forecourts and the liquidity in the market. Over the coming months, we are confident that we will be able to agree a sale to suitable operators to take over all identified sites, and we will share more information in due course.”

Issa brothers’ big plans for Asda

The announcements from both parties give the clearest indication yet that the brothers’ acquisition of a majority stake in Asda –a  deal they originally struck with former parent Walmart last October, will go ahead. The Issa brothers and TDR Capital currently own EG Group, which operates more than 6,000 forecourts across 10 global markets.

When the deal goes through, the Issa brothers plan to plough £1bn into Asda during the first three years of ownership, with a focus on lowering prices and shoring up its supply chain.

It is already trialling a new convenience fascia, Asda on the Move, at a clutch of EG’s petrol station forecourts – a format that is likely to be rolled out further if the acquisition is approved. 

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