ASDA Takeover Nears Completion, Subject To CMA Approval

Following the announcements by EG Group as well as the Issa Brothers and TDR Capital outlining the proposed financing structure behind the acquisition of Asda, Roger Burnley, Asda Chief Executive, said:

“Today’s announcements mark an important step in the purchase of Asda from Walmart by the Issa Brothers and TDR. The main elements relate to how they are planning to finance their purchase and include the proposed sale of the Asda petrol forecourts sites to EG Group. Whilst the transaction remains subject to CMA approval, we will work closely with our new owners on how these Asda sites would operate as part of the EG Group under the Asda brand and ensure they continue to be a price leader in the fuel sector.

“We know that our customers are enduring a challenging time with the latest lock-down and we continue to serve them the best we can through our stores and growing online delivery slots. Throughout 2020 we played our role in tackling the pandemic with our customers and colleagues at the front of our mind – keeping our prices low, protecting our vulnerable colleagues and supporting the communities we serve.

“During the final quarter of the year we delivered a strong performance delivering a 6.9% increase in sales during the 8 weeks to the 24th December as well as doing the right thing for our colleagues by closing our stores on Boxing Day and allowing thousands of our hard working people to spend more time with their family. We were also delighted to be able to announce that we are working with Dell to provide 7,000 laptops to children to help avoid them falling behind in their learning and have just launched our first in-store vaccination services at Cape Hill store in Birmingham and Watford store. We are proud of the role we play in serving our local communities and will continue to play our important role under new ownership.”

EG Group Statement:

On 2 October 2020, it was announced that the shareholders in EG Group (“EG” or “the Group”), the Issa brothers and TDR Capital LLP, had reached an agreement to acquire a majority ownership stake in Asda Group Limited (“Asda”). Today, EG Group is pleased to announce it has agreed to acquire certain assets of Asda, comprising its petrol filling stations, car washes and ancillary land (the “Forecourt Business”) for a headline enterprise value of £750m.

EG’s acquisition of the Forecourt Business is subject to the same CMA regulatory clearance being received by the Group’s shareholders for their acquisition of Asda. Subject to these approvals, the transaction is currently expected to close in the second quarter of 2021.

Financing options are currently being considered but, post-synergies, the transaction is expected to be leverage neutral and accretive to the Group’s financial performance. A detailed integration plan will ensure a seamless transition into EG Group’s UK operations, which have successfully integrated four significant acquisitions since 2015. The forecourts, which will remain an integral part of the broader retail locations where they are situated, will continue to be Asda branded and will remain a price leader in the fuel market.

Zuber Issa CBE and Mohsin Issa CBE, co-founders and co-CEOs of EG Group, in a joint statement, said: “We are excited to have the opportunity to further strengthen our network in the UK through the proposed acquisition of Asda’s forecourt business, which will enhance our position as a major independent forecourt operator and provide a platform for future growth of the combined network.”

EG Group will announce its Q4 and full year 2020 trading results on Thursday February 25, 2021.

Source : ASDA and EG Group

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