Billionaire brothers, Mohsin and Zuber Issa, who own EG Group, one of Britain’s biggest petrol station operators have bought Associated Dairies (ASDA) from Walmart in a £6.8bn deal.
A consortium led by the brothers who also own London private equity firm, TDR Capital had earlier been selected by the American retail giant as the preferred bidder to take over the supermarket chain.
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 of the Exchequer, 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.”
New owners, 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.”
The CEO, Mr Burnley added, “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.”
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 guarantees 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.”
