Billionaire Brothers Buy Asda’s Petrol Station Business for £750 Million.
MOHSIN AND ZUBER ISSA, who together with TDR Capital secured a £6.8bn (€7.8bn) deal to take control at the supermarket, have now agreed for their EG Group to buy Asda’s forecourts business in a massive deal worth £750m (€851m).
The Blackburn brothers built up their fortune from a single petrol filling station in Bury, Greater Manchester, that was bought for £150,000 (€170,230) and now EG, which operates more than 6,000 forecourts globally, said it expects the petrol station takeover to close in the second quarter.
This news is based on the assumption that the acquisition of Asda will be cleared by the UK’s competition regulator. Asda has been owned since 1999 by US giants, Walmart, however, if the acquisition from the Issa brothers goes through it will be under British ownership for the first time in more than two decades.
The Issa brothers and TDR said they also plan to sell some of Asda’s distribution network to property investors.
In a joint statement, the Issa brothers said: “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 £1 billion in the next three years to further strengthen the business and its supply chain.
“We are also excited about the proposed integration of the Asda forecourts into EG’s established UK operations, which we believe would underpin the future growth of the combined network.”
Asda chief executive Roger Burnley said: “Whilst the transaction remains subject to CMA (Competition and Markets Authority) approval, we will work closely with our new owners on how these Asda sites would operate as part of the EG Group under the Asda brand and ensure they continue to be a price leader in the fuel sector.
“We know that our customers are enduring a challenging time with the latest lockdown and we continue to serve them the best we can through our stores and growing online delivery slots.”
Gary Lindsay at TDR Capital said: “We are very proud to be investing alongside Mohsin and Zuber and supporting the next phase of Asda’s exciting growth journey.
“Asda has strong foundations and under the leadership of Roger and his team we look forward to seeing the business move from strength to strength in the future.”
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