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The owners of Asda are said to be in the final stages of completing a £10bn merger between the supermarket and petrol forecourt company EG Group, Sky News has reported.
The Issa Brothers, who own both the supermarket chain and EG Group, are reportedly finalising a deal alongside TDR Capital that would see Asda buy EG Group’s UK and Irish forecourts, with an announcement set to be made later today (26 May).
A merger would mean that Asda and EG UK will together have annual revenues of around £30bn, 170,000 employees and operate nearly 600 supermarkets, 700 petrol forecourts and 100 convenience stores.
According to Sky, the group is expected to use the deal to accelerate Asda’s drive into the convenience store sector.
It added that the merger will be structured as an acquisition of EG UK by Asda costing approximately £1.25bn, and will create one of Britain’s biggest private sector employers.
Sources also told Sky that Apollo Global Management is set to provide over £500m of debt funding to finance the deal.
Reports emerged earlier this year that Mohsin and Zuber Issa were considering merging Asda with EG Group ahead of EG’s £7bn refinancing in 2025. According to reports, they hoped that by merging the businesses, they would be able to refinance EG Group’s debt on more favourable terms.
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 since.
Asda declined to comment at this time.
