The billionaire owners of EG Group and Asda are reported to be considering a merger of the two companies, in a deal that would create a retail giant worth around £10bn, according to a report in The Times.
Co-EG Group founders and CEOs Zuber and Mohsin Issa are said to be in discussions about the merger plans ahead of a meeting about the refinancing of EG Group, which has 7bn of debt due in 2025, according to the report.
A move to combine the two forecourt networks had previously been agreed in 2021. EG Group (around 400 sites) had agreed a deal to acquire Asda’s 320 petrol filling stations, car washes and ancillary land for £750m at the start of 2021, but by October that year confirmed that plans had been dropped.
The deal was part of a complex transaction following the acquisition of Asda by EG Group’s co-founders and co-CEOs Mohsin and Zuber and their private equity backers TDR Capital for £6.8bn.
The acquisition of the forecourt business was subject to the same CMA regulatory clearance being received by the group’s shareholders for their acquisition of Asda. EG Group sold 27 sites to Park Garage Group as part of the CMA requirements.
At the time it was said the forecourts would remain an integral part of the broader retail locations where they were situated, would continue to be Asda branded and would remain a price leader in the fuel market. The Issa brothers were keen that it would enhance their position as a major independent forecourt operator and provide a platform for future growth of the combined network.
However, it is reported that once the two businesses began sharing information they could not agree on a deal.
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