EG to acquire Asda's forecourts for £750m

Blackburn-headquartered EG Group is set to acquire supermarket giant Asda's forecourts operation, including land, filling stations and car washes, in a £750m deal.

The acquisition will take place once the £6.8bn sale of the Asda Group to EG Group's owners Moshin and Zuber Issa and private equity firm TDR Capital is completed.

The sale of Asda by US giant Walmart is on track to be completed later this month, according to a statement released today. It also revealed details of the financing of the deal and reinforced the new owners' commitment to invest more than £1bn in the UK supermarket group over the next three years.

Asda's forecourts will then join the EG's international portfolio. The global convenience and forecourts retailer employs more than 44,000 workers at more than 6,000 sites across Europe, USA and Australia. The sites will keep their Asda branding and continue to offer "competitively-priced fuel".

The Issa brothers and TDR Capital have also announced that when the Asda Group acquisition completes, they plan to sell "certain distribution assets" to real estate investors but insist there will be no disruption to day-to-day retail activities or loss of jobs. Asda will continue to operate the assets.

Mohsin and Zuber Issa said: "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 £1bn 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."

Both the main Asda deal and the acquisition of the forecourts are subject to CMA regulatory clearance. The sale to EG Group is expected to be finalised in the second quarter of 2021.

As part of the financing of their acquisition of Asda, the Issa brothers, TDR Capital and Walmart intend to launch the syndication of €840m of institutional term loan B facilities and, later, the offering of £2,250m of senior secured notes and £500m of senior notes.

After regulatory approval, the Asda board will comprise of Mohsin and Zuber Issa, Manjit Dale and Gary Lindsay of TDR Capital and Chris Nicholas, EVP and Chief Financial Officer for Walmart International, in addition to Asda CEO Roger Burnley. In due course, independent directors will be appointed.

EG Group will announce its Q4 and full year 2020 trading results on Thursday February 25.

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