Asda to buy UK assets of oil chain operator EG Group in £2.3bn deal

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Supermarket chain Asda has agreed to buy the UK and Irish operations of petrol station group EG Group in a £2.3bn deal.

The takeover was masterminded by the billionaire Issa brothers who are co-owners Asda and EG Group, which also operates petrol stations in the United States, Australia and parts of Europe.

Zuber Issa said on Tuesday the deal was “an important strategic step” for EG groupowned by private equity firm TDR Capital.

“Following this sale, EG Group will benefit from a significantly strengthened balance sheet,” it said in a statement.

The proceeds from the sale, plus $1.4 billion secured under a recent US sale and leaseback agreement, will be used to repay EG Group’s debt, the company said.

Asda’s move to acquire EG Group’s UK and Irish operations comes about two-and-a-half years after the Issa brothers bought the supermarket chain with TDR Capital, in a deal that valued the British grocer at £6.8bn.

Following the takeover, the combined group will comprise 600 supermarkets, 700 petrol yards and 100 convenience stores, with 170,000 employees and an annual turnover of approximately £30bn.