Asda confirmed the acquisition of petrol and convenience store EG Group’s UK and Irish business in a deal worth £2.3bn, creating a “consumer champion like the UK has never seen.”
The UK grocer, owned by the Issa Brothers and private equity firm TDR Capital, will snap up 350 petrol-filling sites and over 1,000 food-to-go locations as part of the deal.
“Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen,” said chair of Asda Stuart Rose.
Shareholders are providing roughly £450ln of additional equity to fund the transaction.
According to a statement, the deal will allow Asda to serve around 21mln customers each week.
The acquisition, it said, will strengthen the grocer's financial profile with an additional £195mln in adjusted underlying earnings (EBITDA) after rents and an additional £100mln in profit and loss synergies over the next three years.
“The combination of Asda and EG UK&I creates a convenience and food retailing champion, with nearly £30 billion in annual revenues,” said Gary Lindsay, managing partner at TDR Capital.
Asda said it plans to invest an additional £150mln within the next three years to fully integrate the combined business.
EG Group was founded in 2001 by the Issa Family and has an extensive network of petrol stations and convenience stores across the globe.