Issa brothers strike £750m Asda forecourts deal

EG Group, the retailer owned by Blackburn-based billionaires Zuber and Mohsin Issa, is to acquire the supermarket giant’s UK forecourts business, including petrol filling stations, car washes and ancillary land.

The Issa’s EG Group, whose subsidiary Euro Garages has more than 5,200 petrol stations across the UK and Europe, is also in the process of acquiring a majority stake in Asda Group in a consortium with private equity firm TDR Capital.

The £6.8bn deal was agreed last October but is awaiting approval from capital markets regulators.

EG’s acquisition of Asda’s forecourt business is subject to the same regulatory clearance as the broader ownership stake deal. Asda is currently a wholly owned UK business of US-based Walmart.

Subject to approvals, the forecourts transaction is expected to close in the second quarter of 2021, EG Group said in a statement today.

Financing options are currently being considered and a detailed integration plan is being drawn up to ensure a seamless transition of the Asda assets into EG’s UK operations, which have made four other significant acquisitions since 2015.

The forecourts, which would 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”, the statement added.

The transaction is expected to be “leverage-neutral and accretive to the group’s financial performance”. Asda has been contacted for company-specific information, such as the number of forecourts in its UK and North West portfolios.

As well as the Euro Garages petrol stations, the Issa brothers own a substantial regional property portfolio through investment vehicles such as Monte Blackburn, which is developing the Frontier Park logistics scheme off Junction 6 of the M65 in Lancashire.

Zuber and Mohsin Issa, co-founders and co-chief executives of EG Group, said 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.

“[The deal] will enhance our position as a major independent forecourt operator and provide a platform for future growth of the combined network.”

EG is to announce its Q4 and full-year 2020 trading results on Thursday 25 February.