Asda sold in bumper £7 billion deal to petrol forecourt barons: reaction
Supermarket giant Asda is being bought in a near-£7 billion deal by the billionaire brothers behind petrol forecourt operator EG Group and private equity firm TDR Capital.
Walmart, the UK supermarket chain’s US-based owner, has accepted a bid led by Lancashire brothers Mohsin and Zuber Issa following a lengthy auction process. Walmart will retain a minority stake in Asda as part of the bumper £6.8bn deal.
The move comes more than a year after a proposed merger between Asda and UK rival Sainsbury’s was rejected by regulators.
Asda’s new owners have committed to keeping the retailer’s headquarters in Leeds and said that they will invest to grow its convenience and online operations.
The owners will also face the challenge of keeping prices low amid tough economic conditions for shoppers and potential new tariffs on EU-imported foods, with the other big supermarket chains, including market leader Tesco, all announcing a raft of price cuts in recent months.
EG Group has sealed the deal after its offer was favoured by Walmart ahead of a move by US private equity firm Apollo.
Last week, a third bid from Lone Star Funds, fronted by former Asda executive Paul Mason, was dropped after failing to meet the price of its rivals during the latter stage of bidding.
Blackburn-based EG Group, formerly known as Euro Garages, already runs forecourt convenience stores for Spar and French hypermarket chain Carrefour.
The deal will have to pass through regulators, although it is expected to be given the green light.
Last week, EG Group announced a trial involving three “Asda on the Move” convenience stores at its petrol forecourts.
Roger Burnley, chief executive of Asda, said: “This new ownership opens an exciting new chapter in Asda’s long heritage of delivering great value for UK shoppers.
“With our combined investment, expertise and ambition; Asda, Walmart, the Issa brothers and TDR have an incredible opportunity to accelerate our existing strategy and develop an even more exciting offer for our customers as well as strengthen our business for our colleagues.
“In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth.”
Roger Jenkins, GMB union national officer, said Asda workers had endured months of uncertainty over a proposed takeover by Sainsbury’s – which ultimately fell through.
He said: “We will be speaking to representatives of the consortium, as soon as possible, following the takeover and asking for confirmation of enhancing the relationship between GMB and Asda.
“We welcome their commitment to British suppliers and producers and supporting British Industry and jobs.
“The new owners must offer sound reassurances to more than 100,000 Asda workers. They have had enough uncertainty and need to know that their futures are safe and secure.
“The new owners must recognise that Asda is a profitable well-run company, thanks to our members’ commitment and hard work - particularly through the Covid pandemic.
“It is time Asda gave their retail workers a full say in their pay and terms of conditions of employment, something that has been sadly lacking under Walmart.”
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