Issa brothers’ EG buys £750m Asda forecourt business

Blackburn-based billionaires the Issa brothers and TDR Capital will offload Asda’s petrol stations to the Issa brothers’ EG Group for £750 million when their purchase of the Leeds-based supermarket group from Walmart is completed, they said on Wednesday.

As part of the financing of the Asda deal, the Issa brothers and TDR plan to raise £840 million of loan facilities, £2.25 billion pounds of senior secured notes and £500 million of senior notes.

The Issa brothers said on Wednesday EG Group has agreed to acquire the forecourt business of Asda — comprising its petrol filling stations, car washes and ancillary land — for a “headline enterprise value” of £750 million.

The new follows the announcement in October that the Issa brothers and funds managed by London-based private equity firm TDR Capital agreed to buy a majority ownership stake in Asda from Walmart Inc. for an enterprise value of £6.8 billion.

The UK Competition and Markets Authority (CMA) has formally launched an inquiry into the acquisition.

Privately-held EG Group was founded with a single petrol station in Bury as Euro Garages by the Issa brothers and has grown fast around the world through a series of debt-fueled deals.

“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,” said EG Group.

“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 and Mohsin Issa, co-founders and co-CEOs of EG Group, said in a joint statement: “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.”