The billionaire brothers behind one of Britain’s biggest petrol station operators have bought Asda from Walmart in a £6.8bn deal.
Sky News exclusively revealed earlier this week that a consortium led by Mohsin and Zuber Issa, the bosses of Blackburn-based EG Group, and TDR Capital, the London private equity firm, had been selected by the American retail giant as the preferred bidder to takeover the supermarket chain.
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Image: Walmart will retain a stake in the business with a seat on the board
Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.
Asda will remain headquartered in Leeds and will continue to be led by current chief executive Roger Burnley.
The sale brings Asda back under British ownership for the first time since 1999, when Walmart paid £6.7bn for the business.
The new owners have promised to invest more than £1bn in the business over the next three years as well as continue to offer low prices across its stores.
The takeover has been welcomed by Chancellor Rishi Sunak, who tweeted: “Great to see @asda returning to majority UK ownership for the first time in two decades today.
“The new owners have already committed to investing over £1bn in the next three years and increasing the proportion of UK-based suppliers. I wish them the best of luck.”
Image: Chancellor Rishi Sunak has wished the new British owners ‘the best of luck’
The deal comes more than two years after Walmart plotted a merger of the British chain with rival Sainsbury’s, which was eventually scuppered by competition regulators.
Mohsin and Zuber Issa said in a statement: “We are very proud to be investing in Asda, an iconic British business that we have admired for many years.
“Asda’s customer-centric philosophy, focus on operational excellence and commitment to the communities in which it operates are the same values that we have built EG Group on.
“Asda’s performance through the COVID-19 pandemic has demonstrated the fundamental strength and resilience of the business, and we are excited to support Roger and his team as they continue to reposition the business to drive long-term growth.
“We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy.
“After a successful period as part of Walmart we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the UK.”
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Mr Burnley 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.
“For Asda colleagues, a strong and growing business is important for our long-term future.”
Gary Lindsay, at TDR Capital, said: ”Asda is a strong and well-managed business with one of the leading brands in UK retail.
“We are proud to be investing alongside Mohsin and Zuber, who have built EG Group into a global convenience retailer and will now bring that experience to bear at Asda.”
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Walmart boss Judith McKenna said: “I’m delighted that Walmart will retain a significant financial stake, a board seat, and will continue as a strategic partner.
“Asda has been a powerhouse of innovation for the rest of the Walmart world, and we look forward to continuing to learn from them in the future.
“This important combination will continue to keep customers and colleagues at Asda’s heart, which is important to us all.”
The sale, which is subject to regulatory approvals, is expected to be completed in the first half of next year.
Meanwhile, the GMB union has called for reassurances for more than 100,000 workers following the announcement.
National officer Roger Jenkins 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.”