Asda to acquire majority of EG's UK business in multi-billion-pound deal

Blackburn-based EG Group has agreed to sell the majority of its UK and Ireland fuel, foodservice, grocery and merchandise business to Asda in a deal worth £2.27bn.

The proceeds, together with the $1.4bn sale and lease back deal of its American portfolio, will be used to repay debt.

The group's net leverage will fall to below five times, but further work must be undertaken to reach its near-term goal of a mid-four times multiple.

EG's owners say the deal will also strengthen its ability to continue to expand the  foodservice, grocery and merchandise side of the business and rollout its EV chargers, offered under its proprietary brand evpoint, across its existing network and third-party locations.

EG Group will continue to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium, whilst also retaining around 30 UK sites which are close to the group headquarters and frequently used to trial innovation.

The Cooplands bakery business and certain other foodservice brands will also be retained.

The Waterside offices in Blackburn will remain as the global headquarters and shared service centre for the group.

The transaction is expected to complete in Q4 2023.

Zuber Issa CBE, co-founder and co-CEO of EG Group, said: “This transaction with Asda represents an important strategic step for EG Group. Following this sale, EG Group will benefit from a significantly strengthened balance sheet, supporting the continued roll out of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience.

"This includes the ongoing investment and expansion of our EV charging business, evpoint, as well as hydrogen and other sustainable fuel retail infrastructure, which we continue to see as a significant future opportunity. 

“I am confident the UK&I business will go from strength to strength under Asda’s ownership. Over the last 22 years we have built a business that I am extremely proud of, and EG Group will continue to maintain an important base in the UK, supporting the global business from our home in Blackburn."

Gary Lindsay, managing partner at TDR Capital, said: “The sale of the EG UK&I business to Asda makes strategic sense for both parties and will enable EG Group to accelerate its growth in key markets including Europe, the US and Australia."