The two groups have now acquired a majority stake in Walmart’s wholly-owned UK business on a debt-free and cash-free basis, and the transaction is expected to be finalised in the first half of 2021.
Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.
The Issa brothers, backed by TDR Capital, said they will “support and accelerate” Asda’s existing business strategy.
It comes as Asda reports a doubling of its online operations during the course of the pandemic. With “support” from its new ownership, Asda said it will continue to “invest in accelerating its omnichannel offer” and in the “resilience of its supply chain”.
Asda will remain headquartered in Leeds, and will continue to “be a significant contributor to the UK economy and tax base”.
In addition, it will continue to be led by Roger Burnley who will form part of Asda’s board alongside representatives appointed by the Issa brothers, TDR Capital and Walmart.
Following the acquisition, the Issa brothers said they will “bring significant additional expertise, particularly in convenience retail and brand partnerships, drawing on their experience of building a global convenience retailer with more than 6,000 sites”.
They added that it will maintain competitive pay levels for Asda colleagues, and invest over £1bn in the next three years in Asda to “further strengthen” the business and its supply chain.
It will also increase the proportion of UK-based suppliers, increasing the volume of products purchased from UK suppliers each year, as well as a commitment to source 100% British beef.
Judith McKenna, president and CEO of Walmart International, said: “We are delighted to be able to announce this deal today, which we believe creates the right ownership structure for Asda, building on its 71 year-heritage, whilst bringing a new entrepreneurial flair, not only to Asda, but also to UK retailing.
“I’m delighted that Walmart will retain a significant financial stake, a board seat, and will continue as a strategic partner.”
Roger Burnley, CEO of Asda, said: “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.”
He added: “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. I want to thank every single one of our people for the incredible work they do serving our communities, and together our focus will remain on building a better Asda for the benefit of all.”