Competition watchdog to investigate Issa brothers’ Asda acquisition

Petrol station tycoons Mohsin and Zuber Issa struck a deal to acquire the supermarket giant from Walmart earlier this year after securing investment from TDR Capital.

Under the terms of the deal, the Issas and TDR would own equal stakes in Asda, with Walmart maintaining a minority shareholding.  

But the CMA has kicked off a phase one investigation into the proposed deal after it was referred to the regulator by the European Commission. 

The watchdog, which blocked Walmart’s previous attempt to merge Asda with Sainsbury’s over competition fears, will now assess whether the sale to the Issas would also create a “substantial lessening of competition”. 

Interested parties have been asked to submit their responses to the inquiry before Christmas. The CMA must then decide by February 18 whether or not to launch a more detailed phase two inquiry. 

The Issa brothers operate petrol forecourt giant EG Group, which owns more than 6,000 sites across 10 global markets. 

One area of concern for the CMA could be the scale and overlap of Asda and EG’s fuel businesses. Asda owns 320 petrol filling stations, while EG has 341 across the UK.

Should the deal go through, the Issas 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.

A spokesman for the Issa brothers and TDR said: “We are looking forward to working constructively with the CMA to address any questions they may have.”