Billionaire brothers buy Asda

Zuber and Mohsin Issa

Forecourt operator EG Group has bought Asda from Walmart for £6.8bn.

The US grocery giant had put its controlling stake in the British supermarket up for auction after the Competition and Markets Authority blocked Asda’s £7.3bn merger with rival Sainsbury’s last April.

EG Group, which is owned by self-made billionaire brothers from Blackburn Zuber and Mohsin Issa (pictured), has the backing of private equity firm TDR Capital.

Walmart paid £6.7bn for Asda in 1999 and will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.

Formerly known as Euro Garages, EG Group was founded in 2001 with a single forecourt in Bury. It now operates more than 5,200 petrol stations across the UK and Europe. Three of these in the Midlands are pilot sites for Asda’s recently-launched ‘Asda On The Move’ foray into the convenience channel.

The two brothers expressed a desire to support Asda’s management to achieve long-term growth.

They commented: “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.”

Asda will remain headquartered in Leeds under current boss Roger Burnley.

He said: “This new ownership opens an exciting new chapter in Asda’s long heritage of delivering great value for UK shoppers. With our combined investment, expertise and ambition; Asda, Walmart, the Issa brothers and TDR have an incredible opportunity to accelerate our existing strategy and develop an even more exciting offer for our customers as well as strengthen our business for our colleagues.

The GMB union immediately called on the new owners to “offer sound reassurances to more than 100,000 thousand Asda workers”.

Roger Jenkins, GMB National Officer, said: “It is time Asda gave their retail workers a full say in their pay and terms of conditions of employment, something that has been sadly lacking under Walmart.”