- Wednesday, May 15, 2024
By: Neeraj Krishna
BRITISH INDIAN billionaire brothers Mohsin and Zuber Issa have acquired a majority stake in the Asda supermarket chain from Walmart after £6.8 billion deal was struck as part of a consortium involving private equity firm TDR Capital.
The Issa brothers, whose parents moved to the UK from Gujarat in the 1970s, own the Euro Garages chain of petrol stations as part of their EG Group business.
“The Issa brothers have a reputation for good brand partnerships, for convenience and for growth and that’s really what we were interested in for Asda,” said Judith McKenna, president and CEO of Walmart International.
“The brothers and TDR will help make decisions about what that future path looks like.”
The deal, which followed an auction process for Asda over several months, returns the 71-year-old supermarket company back into British ownership after 21 years — a development welcomed by Chancellor Rishi Sunak.
“Great to see Asda returning to majority UK ownership for the first time in two decades today,” Sunak said on Twitter.
“The new owners have already committed to investing over GBP 1 billion in the next three years and increasing the proportion of UK-based suppliers. I wish them the best of luck.”
The Issa brothers said they were “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,” they added.
The brothers, born in Blackburn in north-west England, pledged support for the long-term growth of the supermarket as they praised the chain’s performance during the Covid-19 pandemic, demonstrating the “fundamental strength and resilience” of the business.
“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,” they said in a joint statement.
“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.”
Announcing the deal, Walmart said Asda would keep its headquarters in Leeds, with chief executive Roger Burnley continuing to be in charge.
Burnley welcomed the new ownership as an exciting new chapter and committed to delivering value to customers.
“In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth,” he said. “For Asda colleagues, a strong and growing business is important for our long-term future.”
Founded in 1965, Asda has the third biggest market share among supermarket chains in the UK, behind Sainsbury’s and the UK’s largest retailer Tesco.
Recent data showed that Asda’s online sales doubled in the second quarter when Britain was in lockdown.
“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,” Burnley said.
Walmart retains an equity investment in the business with an ongoing commercial relationship and a seat on the board. The deal, which is subject to regulatory approvals, is expected to be completed in the first half of 2021.
