Asda Group has announced the acquisition of EG Group’s UK and Ireland operations for an enterprise value of around £2.27 billion.
Asda, owned by the Issa brothers, investment funds managed by TDR Capital LLP and Walmart, is acquiring the EG UK and Ireland business consisting of c.350 petrol filling station sites and over 1,000 food-to-go locations – through an affiliate of its parent company, Bellis Acquisition Company 3 Limited, a wholly-owned subsidiary of the Asda Group. EG Group will retain approximately 30 PFS sites in the UK for wider group development and which will not form part of the transaction.
Following completion of the transaction, Asda said it plans to invest more than £150 million within the next three years to fully integrate the combined business. As part of the transaction the shareholders are providing c.£450 million of additional equity to fund the transaction.
Stuart Rose, chair of Asda, said: “Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen. Throughout my career in retail – one thing has always been true, that meeting the evolving needs of customers is the route to growth.
“This transaction is all about driving growth by bringing Asda’s heritage in value to even more communities and accelerating the growth of its convenience retail business.”
Mohsin Issa, co-owner of Asda, said: “Asda is committed to saving customers precious time and money across their shopping baskets and on the forecourt. The combination of Asda and EG UK&I will be positive news for motorists, as we will be able to bring Asda’s highly competitive fuel offer to even more customers.
“I would like to sincerely thank all colleagues at both businesses for their ongoing efforts to serve our customers during tough economic times, and I look forward to welcoming our new colleagues from EG UK&I and expanding the Asda family further.”
Gary Lindsay, managing partner at TDR Capital LLP, said: “The combination of Asda and EG UK&I creates a convenience and food retailing champion, with nearly £30 billion in annual revenues. The two businesses are highly complementary, bringing together Asda’s traditional focus on mid-to-large sized supermarkets and EG UK&I’s on convenience retail, foodservice and fuel.