Asda completes acquisition of EG Group’s UK business

The deal was originally announced in May 2023 and has now been completed at an enterprise value of £2.07bn

Luke Martin October 31 2023

Asda has successfully finalised the acquisition of EG Group’s UK business at an enterprise value of £2.07bn ($2.51bn).

Zuber and Mohsin Issa took over Asda in 2020. Both Asda and EG Group are owned by the brothers and private equity group TDR Capital.

The deal was originally announced in May 2023 and had been priced at £2.27bn.

Expanding convenience with Asda Express

Asda plans to introduce its new convenience brand, Asda Express, across EG UK’s 356 sites, including modern convenience stores on petrol filling stations (PFS). 

The acquisition builds on Asda’s recent purchase of 119 convenience sites from the Co-op Group, with ongoing conversions to Asda Express.

Currently boasting 478 convenience stores, Asda aims to open an additional 300 stand-alone convenience stores by the end of 2026.

The first standalone Asda Express opened in November 2022.

Strategic growth and consumer benefits

This acquisition accelerates Asda’s move into the £62bn foodservice market, including the transfer of 462 Greggs, Burger King and Subway outlets. 

Asda’s long-term ambition is to become the UK’s second-largest supermarket, serving 21 million customers weekly and generating nearly £28bn in combined revenues.

The adjusted acquisition price reflects a strategic agreement, with Asda anticipating over £250m of incremental EBITDA within the first two years. 

EG impact and strategy

The EG Group will continue to operate in the US, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium as well as 32 sites in the UK.

Some of the proceeds from the deal will be used to repay EG’s debt, set to mature in 2025 and will allow it to continue its strategy to deploy emerging fuels and EV chargers, under its evpoint brand.

The Group will also retain control of foodservice brands including its bakery business Cooplands and franchise businesses with Starbucks, KFC, Sbarro, Chaiiwala and Cinnabon.

EG Group co-CEO and co-founder Zuber Issa said: “The sale of the majority of EG Group’s UK business to Asda represents an important strategic step for the company, enabling EG to support the continued roll out of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience.”

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