Asda to merge with petrol station giant EG Group in £2.3bn deal
Supermarket group Asda has agreed to buy petrol station operator EG Group’s UK and Ireland business for £2.3bn.
Both Asda and EG Group are owned by billionaire brothers Zuber and Mohsin Issa and private equity group TDR Capital.
The deal will be funded by a combination of debt and equity, including around £1.1bn of property-related transactions. Asda said that since the EG Group’s UK and Ireland portfolio is almost entirely a freehold estate, valued at around £1.2bn, the transaction will not impact Asda’s freehold value of £9.6bn.
Supermarket group Asda has agreed to buy petrol station operator EG Group’s UK and Ireland business for £2.3bn.
Both Asda and EG Group are owned by billionaire brothers Zuber and Mohsin Issa and private equity group TDR Capital.
The deal will be funded by a combination of debt and equity, including around £1.1bn of property-related transactions. Asda said that since the EG Group’s UK and Ireland portfolio is almost entirely a freehold estate, valued at around £1.2bn, the transaction will not impact Asda’s freehold value of £9.6bn.
Asda said the deal will speed up its plans to open more “Asda Express” stores across EG Group’s estate. Since the brothers bought Asda in 2021, 166 EG sites have been converted to the “Asda on the Move” convenience store format.
EG Group operates around 350 petrol filling stations and more than 1,000 food-to-go locations. It will retain around 30 petrol stations in the UK for “wider group development” and will not form part of the deal, according to Asda.
The deal will create a group with a combined revenue of nearly £30bn. After the deal closes, Asda will invest more than £150m in the next three years to integrate the businesses.
The transaction is expected to close in Q4 this year.
Mohsin Issa said: “The combination of Asda and EG UK and Ireland will be positive news for motorists, as we will be able to bring Asda’s highly competitive fuel offer to even more customers.”
Stuart Rose, chair of Asda, said: “Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen. Throughout my career in retail, one thing has always been true: that meeting the evolving needs of customers is the route to growth.
“This transaction is all about driving growth by bringing Asda’s heritage in value to even more communities and accelerating the growth of its convenience retail business.”
Eastdil, Barclays, Rothschild and Addleshaw Goddard advised on property matters relating to the deal.
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