Asda, which is owned by the Issa brothers, is set to acquire the EG UK and Ireland business consisting of 350 petrol filling station sites and over 1,000 food-to-go locations. EG Group will keep around 30 PFS sites in the UK for wider group development, which will not be a part of the transaction.
The combination of Asda and EG UK&I will be transformational and allow Asda to serve a combined base of around 21 million customers every week. This will leverage Asda’s growing loyalty scheme while bringing together convenience, fuel, GM, grocery, foodservice, and omni-channel retailing.
Following the completion of the transaction, Asda plans to invest over £150m within the next three years to fully integrate the combined business. As part of the transaction, the shareholders will also provide £450m of additional equity to fund the transaction.
Moreover, Asda expects to realize over £100m of working capital benefits due to its enlarged scale. The merged entity will be better placed to benefit from attractive structural drivers behind the convenience and foodservice markets.
Stuart Rose, chair of Asda, stated that “Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen before.” He further added that meeting the evolving needs of customers is essential for growth.
The transaction is expected to create positive news for motorists, as the combined entity will be able to bring Asda’s highly competitive fuel offer to even more customers. Mohsin Issa, co-owner of Asda, is excited about the acquisition and states that Asda is committed to saving customers precious time and money across their shopping baskets and on the forecourt.
To sum up, the transaction will close in Q4 2023 and create a consumer champion in the convenience and foodservice markets. Asda is aiming to be the go-to place for communities, and this acquisition is the first step towards achieving that goal.