Issa brothers mull EG merger with Asda
BLACKBURN’S millionaire Issa brothers are exploring a merger of EG Group with supermarket chain Asda, media reports said.
Mohsin and Zuber Issa, who own EG Group alongside TDR Capital, bought Asda last year from Walmart in a deal that valued the UK’s thirdlargest grocer at £6.8 billion. The acquisition also brought the Leeds-headquartered company back under British ownership.
However, Walmart holds a minority stake in Asda after the transaction was completed earlier this year.
The option of merging EG Group with Asda is at the deliberation stage and there’s no certainty that it will lead to a transaction, Bloomberg said, citing sources. The owners could also explore other options if such a merger poses legal hurdles.
Eastern Eye could not reach EG Group for comment.
EG Group and Asda are together believed to be worth £26.2bn, including the debts of the two entities.
EG Group has a total borrowing of about £7bn, while Asda’s debts stood at £4.35bn, according to the report.
The brothers’ attempt to transfer Asda’s forecourt business to EG Group, which
was expected to reduce the grocer’s debts, fell through last month.
Separately, Asda last week appointed Stuart Rose, the former boss of Marks & Spencer, as its new chairman.
Rose, 72, will take up the chairman’s role at Asda on Wednesday (1), the group said.
Asda also named Alison Carnwath, a former chair of Land Securities, as a non-executive director, effective Wednesday (1). She also sits on the EG board.
EG is looking to off-load its Australian forecourt business which it had acquired from Woolworths Group in 2019 in a $1.2 bn (£900 million) deal.
A potential sale of the Australian chain of 540 fuel convenience sites could now potentially bring $2bn (£1.5bn) to EG.
EG had a modest start with a single filling station in Blackburn about two decades ago.