Eastern Eye (UK)

Asda-EG Group UK merger likely by April end: Report


A MERGER of Asda and the UK business of petrol forecourts chain EG Group is likely to be completed by April end, a media report said.

A successful merger which would create a mega retail entity worth around £12 billion – is expected to ease EG’s debt burden and help its owners negotiate its refinancin­g on more favourable terms.

Both Asda and EG Group are jointly owned by Blackburn’s billionair­e Issa brothers – Mohsin and Zuber – as well as the Londonbase­d equity firm TDR Capital.

Barclays and Rothschild are understood to be advising them on the potential merger. Likely to be structured as a takeover of EG UK by Asda, the deal could add to the supermarke­t chain’s current debt of £4.7bn, according to a

Times report. The Issa brothers and TDR Capital acquired Asda from Walmart for an enterprise value of £6.8bn two years ago, bringing the Leeds-headquarte­red supermarke­t giant back under British control. Reports on Tuesday also said the siblings were eyeing a takeover of Subway, the fast food chain. A source told the

Sun: “EG Group have felt for a while that Subway treated them the same way as other franchise partners and their massive growth hadn’t been appreciate­d. So what better way to show who’s boss than owning them.”

Mohsin and Zuber, who made a modest beginning when they establishe­d EG Group with a single forecourt in Bury, have expanded their business quickly over the years.

Jointly ranked sixth in Eastern Eye’s Asian Rich List with a combined wealth of £6.5bn, the siblings also bought the Cooplands and Leon brands as they diversifie­d their portfolio.

EG, which needs to refinance its £7 bn debt by 2025, announced earlier this month a $1.5 bn (£1.2bn) sale and leaseback deal on 415 stores in the US.

Zuber said in a statement at the time the management was committed to “further significan­t deleveragi­ng”.

 ?? ?? PROUD: Zuber Issa with his award after he was made a CBE in December 2021
PROUD: Zuber Issa with his award after he was made a CBE in December 2021

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