Lancashire entrepreneurs complete £6.8bn Asda deal

Zuber and Mohsin Issa of EG Group won EY's overalll UK Entrepreneur of the Year award in 2018

The Issa brothers who created the £20bn-turnover EG Group in less than 20 years after first buying a Bury petrol station for £150,000 have become the new owners of Asda.

The Lancashire entrepreneurs Mohsin and Zuber Issa have agreed a £6.8bn deal with Walmart to bring the supermarket chain back into British ownership for the first time in 21 years.

The acquisition comes 18 months after competition authorities blocked a planned merger between Sainsbury’s and Asda.

The Issa-led consortium includes TDR Capital, the London-based private equity firm which also has a stake in Doncaster headquartered developer Keepmoat Homes.

The consortium has taken a majority stake in Asda and Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.

Asda will remain headquartered in Leeds and the business will continue to be led by chief executive Roger Burnley. They have committed to invest more than £1bn in the next three years into Asda to further strengthen the business and its supply chain

Mohsin and Zuber Issa said: “We are very proud to be investing in Asda, an iconic British business that we have admired for many years.

“Asda’s customer-centric philosophy, focus on operational excellence and commitment to the communities in which it operates are the same values that we have built EG Group on.

“Asda’s performance through the Covid-19 pandemic has demonstrated the fundamental strength and resilience of the business, and we are excited to support Roger and his team as they continue to reposition the business to drive long-term growth.”

EG Group started out as Euro Garages and is now an international retail group with more than 30,000 employees. The Blackburn-based brothers won EY’s prestigious UK Entrepreneur of the Year award in 2018 in recognition of the group’s incredible growth.

EG already has an existing relationship with the supermarket chain which announced plans to trial its “Asda On the Move” convenience store concept at three of EG Group’s forecourts.

The Issa brothers added: “We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy.

“After a successful period as part of Walmart we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the UK.”

The latest data from Kantar showed Asda having a 14.5% share of the UK grocery market, just behind Sainsbury’s, which has 14.9%, and just ahead of the combined share for Aldi and Lidl, of 14.0%.

While its performance has stabilised in the last couple of years, between 2008 and 2015 Asda’s market share was mostly above 17% before the supermarket chain lost its way in a fiercely-competitive market when Morrisons, then Tesco, performed turnarounds and the discount supermarkets continued to expand.

Burnley, who has led Asda since January 2018, said: “This new ownership opens an exciting new chapter in Asda’s long heritage of delivering great value for UK shoppers.

“In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth.”

Click here to sign up to receive our new South West business news...
Close