Asda deal nears as Issa brothers offer petrol station sell off
The sale of Asda to the billionaire Issa brothers and private equity firm TDR Capital looks to be moving forward as the group has jointly offered to sell 27 EG Group petrol stations as they work to avoid a full investigation by the Competition and Markets Authority (CMA).
Last month the CMA warned the acquisition could lead to increases in the price of petrol after finding “local competition concerns”.
In a filling today the CMA states it “considers there are reasonable grounds for believing the undertakings” offered by the brothers and the private equity firm or a “modified version of them, might be accepted by the CMA”.
The watchdog now has 40 days to analyse the proposals.
Following the update from the CMA, the Issa Brothers and TDR Capital said: “Over the course of the past 10 days, we have been working constructively with the CMA to offer remedies to address the CMA’s competition concerns. Today, we are pleased to confirm that the CMA has indicated it has reasonable grounds to believe the proposed remedies are acceptable, enabling us to arrive at a conclusive outcome for the acquisition of Asda in Phase 1.
“As is usual in cases such as these, the CMA now has a period of 40 days to work through the detail of the proposed divestitures and therefore we are restricted in the level of information we are able to provide on specific sites. However, we have been comforted by the significant interest we have already received from potential buyers during this process, demonstrating the strong growth potential of our forecourts and the liquidity in the market. Over the coming months, we are confident that we will be able to agree a sale to suitable operators to take over all identified sites, and we will share more information in due course.”
The deal to acquire Asda and bring it back into British ownership was announced in October, and valued the supermarket business at £6.8bn.
The brothers and TDR established a takeover vehicle called Bellis Acquisition Company for the acquisition and said at the time they were “very proud to be investing in Asda, an iconic British business that we have admired for many years”.
Following the deal the brothers committed to keeping Asda’s headquarters in Leeds and said they would be investing to grow its convenience and online operation.