EG Group will buy Asda’s petrol forecourt business in a £750m deal following the completion of the supermarket giant’s sale to the Issa brothers.
The acquisition, which is subject to regulatory approval by the Competition and Markets Authority, will include Asda’s petrol filling stations, car washes and ancillary land.
EG said the sites will continue to be Asda branded following the purchase, which is expected to be rubber-stamped by the CMA during the second quarter of 2021.
EG co-founders Mohsin and Zuber Issa, who struck a shock deal to buy Asda last October, said in a joint statement: “We are excited to have the opportunity to further strengthen our network in the UK through the proposed acquisition of Asda’s forecourt business, which will enhance our position as a major independent forecourt operator and provide a platform for future growth of the combined network.”
The move comes four months after the Issa brothers and TDR Capital sealed their ambitious £6.8bn swoop to buy Asda from its US owner Walmart.
Upon completion of that acquisition, EG Group will take ownership of Asda’s forecourts business, with its core supermarket business and its online operations owned separately by the Issas and TDR Capital. Walmart will also retain a minority stake.
EG said it was drawing up “a detailed integration plan” to ensure a “seamless transition” of Asda’s forecourt sites into the existing group, which operates more than 6,000 sites across the globe.
This morning, the Issas and TDR Capital provided an update on their financing plans for the £6.8bn Asda deal.
The Issa brothers, TDR and Walmart will launch the syndication of €840m (£740m) loan facilities. They will also offer £2.25bn of secured notes and £500m of senior notes to help fund the acquisition.
Following the CMA’s approval of the deal, Mohsin and Zuber Issa will both join the Asda board, alongside TDR Capital’s Manjit Dale and Gary Lindsay, Asda boss Roger Burnley and Walmart International finance boss Chris Nicholas.
The Issas also reaffirmed plans to plough £1bn into the supermarket giant during the first three years of their ownership.
They added: “Asda is an iconic British business that we have known and loved since we were children. We are proud to bring its ownership back to the UK and delighted that, with the support of TDR Capital and Walmart, we can invest in its future.
“Local control means that strategic decisions will be more closely aligned with colleagues, customers and communities.
“With TDR Capital, our long-time partners, we are committed to supporting Roger Burnley, chief executive of Asda, and his team as they continue to reposition the business to drive long-term growth.
“We are putting in place a robust capital structure to support that growth strategy, and we are confident that external investors will share our belief in Asda’s strong fundamentals and exciting future prospects.
“Looking ahead, and subject to the required regulatory approvals, we look forward to working with our Asda colleagues to build an even stronger, more differentiated retailer – including through the investment of more than £1bn in the next three years to further strengthen the business and its supply chain.”