Supermarket chain Asda is to be sold to two brothers from Blackburn in a deal worth £6.8bn.
The new owners, Mohsin and Zuber Issa, who have backed by investment firm TDR Capital, founded their Euro Garages business in 2001 with a single petrol station in Bury which they bought for £150,000. The business now has around sites in Europe, the United States and Australia and annual sales of around £18bn.
The new owners say they will maintain pay levels for Asda staff and saying the chain will have low prices for food and petrol for customers. They have also pledged to increase the proportion of good bought from UK suppliers and will source all of their beef from this country.
Current American owners Walmart, which bought Asda in 1999 for £6.7bn, will retain a small stake in the business.
Asda will remain headquartered in Leeds, and will continue to be led by CEO Roger Burnley.
Mohsin and Zuber Issa said: “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.
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“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.”
Roger Burnley, chief executive officer of Asda, said: “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. 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.”
The deal comes more than a year after a proposed merger between Asda and UK supermarket rival Sainsbury’s was torpedoed by regulator.
Asda has seen its fortunes improve recently with trading strengthening through 2020, as shoppers have spent more money on groceries during the pandemic.
In the quarter to June, Asda saw online sales double but the new owners will be tasked with expanding its digital business further to take advantage of soaring demand and make ground on rivals, such as Tesco, who have a larger slice of the market.
The transaction is subject to regulatory approvals and is expected to complete in the first half of next year.