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Asda owners Mohsin and Zuber Issa are reportedly considering merging the company with the EG Group ahead of EG’s £7bn refinancing in 2025, according to the Times.
Both companies are jointly owned by the blackburn-based brothers and private-equity company TDR Capital. The owners hope that by merging the businesses they will be able to refinance EG Group’s debt on more favourable terms.
The Times stated that the merger would create a business worth between £11bn and £13bn, with 581 supermarkets, 700 petrol forecourts and more than 100 convenience stores.
The Issa brothers acquired Asda two years ago in a £6.8bn deal and have opened 70 ‘Asda On the Move’ convenience stores in EG petrol stations.
The deal may be structured as an acquisition of EG UK by Asda, the brothers are being advised by bankers Barclays and Rothschild.
The Times reported that the competition regulator’s view is unclear at this stage, although last week the regulator launched an inquiry into Asda’s acquisition of the Co-op’s forecourt sites.
Asda bought 129 of the Co-op’s petrol forecourt sites in a £611m deal last October.
