Long-awaited Euro Garages merger to go ahead

FORECOURTS operator Euro Garages, the Blackburn-based company owned by brothers Mohsin and Zuber Issa, is to merge with with its European rival and bring in a new chairman.

Euro Garages agreed an investment deal with London-based investment firm TDR Capital for a minority stake, which valued the company at around £1.3bn, around a year ago.

It has been expected for some time that the deal would will lead to a merger of Euro Garages with TDR-owned rival European Forecourt Retail.

The deal also sees the appointment of former Asda boss Tony DeNunzio as chairman of the enlarged business as it plans to build convenience retail operations.

After leaving Asda in 2005 after 12 years, DeNunzio went on to work with private equity-backed retailers including Maxeda in the Netherlands to Pets at Home, which he joined in 2010 and where he is still chairman following its sock market listing in 2014.

Euro Garages has 338 sites across the country, with just 25% of profits coming from fuel. Its trick has been to offer partnerships with retailers, including Spar and Subway, to allow motorists to grab groceries or a bite to eat at the same time as refuelling their vehicles and it has just embarked on a pilot of Sainsbury’s convenience stores.

Meanwhile, European Forecourt Retail Group, which has some 1,100 locations across Europe, says that convenience store operations are a key component of its future growth strategy.

Euro Garages’ founders, Mohsin and Zuber Issa will remain shareholders in the combined business.

Last year’s investment deal made multi-millionaires of the brothers who started the business in 2001 when they bought a single petrol station near Manchester. They featured in this year’s Rich List, at 164, with an estimated combined fotune of £700m.

Euro Garages’ turnover was £815.6m, with pre-tax profits of £34.8m in the year to July 2015. Fuel accounted for around £674m of turnover, while retail and food sales were £141m.

Rothschild advised on the merger deal.