• Purchase of the UK business of EG Group finalised
  • Asda’s new convenience brand Asda Express to be rolled out at 356 EG sites
  • 119 former Co-op Group sites already switching to Asda Express
  • Asda will bring down prices of groceries and fuel for millions across new estate
  • Transaction expected to be a net jobs creator for Asda

Asda Express PFS - Locking 3

A pledge to lower fuel prices has been made by co-owner of Asda, Mohsin Issa, following the completed £2.07bn acquisition of EG Group’s UK business.

He said that with the deal complete, the company can focus on delivering growth opportunities, meaning ”lowering the price of fuel for more motorists”.

Asda has reported that buying the EG UK business - co-founded by Mohsin and his brother Zuber in 2001 and ranked number two in the most recent Top 50 Indies listing - is a key part of the strategy to create a ’value-led convenience offer’ by rolling out Asda Express across EG UK’s 356 predominantly freehold sites – which include modern convenience stores on petrol filling stations (PFS), and benefit from high footfall and traffic flow.

The acquisition builds on Asda’s purchase of 119 convenience sites with attached PFS from the Co-op Group, which started to convert to the Asda Express fascia earlier this month, and the launch of three stand-alone Asda Express convenience sites since October 2022.

The EG and Co-op acquisitions, plus the three Asda Express stores currently open, give Asda 478 convenience stores, with a commitment to opening a further 300 stand-alone convenience stores by the end of 2026; in addition to its existing estate of 580 supermarkets and 31 Asda Living stores, as well as 321 PFS sites.

Asda’s growth strategy in the convenience sector is a key part of its long-term ambition to become the UK’s second largest supermarket. The acquisition also accelerates Asda’s move into the £62bn foodservice market, with the transfer of 462 Greggs, Burger King and Subway outlets as franchise agreements. Asda now wholly owns Leon, which it will also look to introduce to its stores.

The acquisition of EG Group’s UK business by Asda will create a group with expected combined revenues of nearly £28bn, serving some 21m customers every week. It will also bring together convenience, fuel, GM, grocery, foodservice and omni-channel retailing.

Both companies are owned by Mohsin and his brother Zuber Issa and the private equity firm TDR Capital.

Mohsin said: “This is a great day for Asda and for millions of UK consumers. Asda is a much-loved brand that is instantly recognised for great value. I could not be more proud or excited that the iconic Asda sign is now coming to hundreds more communities.

“We have worked at pace over the past 12 months to deliver a compelling convenience proposition from a standing start - as well as investing more than £120m in lowering the price and further improving the quality of our food. With the deal complete, we can focus on delivering the growth opportunities. That means lowering the price of fuel for more motorists, bringing Asda’s great value and quality to more communities, offering greater opportunities to our supplier partners and creating sustainable job opportunities for colleagues in our stores and depots. 

Lord Stuart Rose, chair of Asda, said: “As families continue to face into cost-of-living challenges, bringing Asda’s long-standing value in groceries and fuel to even more communities is a win for UK consumers. Asda has shown through its actions over the last 18 months that it is firmly on the side of consumers…The combination of Asda and EG UK will only create more opportunities for Asda to bring that focus on value to even more communities – as well as driving the sustainable growth of the business through a convenience offer of genuine scale and substance.

Gary Lindsay, managing partner at TDR Capital LLP, said: “This transaction is all about growth – and bringing together the complementary strengths of Asda and EG UK. We are creating an enhanced and more diverse Asda business that delivers even greater value for its customers on a daily basis in stores and online. Becoming the number two UK supermarket again and delivering a stronger and more compelling proposition for UK consumers are the metrics we will judge the success of this transaction by.”

The companies reported that the revised acquisition price - it was initially £2.27bn - reflects adjustments agreed between the two parties as they have worked through the detail of the transaction. Asda expects to generate over £250m of incremental EBITDA on an annualised basis post synergies within the first two years. These synergies will mainly arise through economies of scale of the combined entity, higher volumes and cross-selling opportunities from a large and highly complementary customer base. 

Lord Stuart Rose will continue in his role as chairman of the new, combined business alongside Dame Alison Carnwath as non-executive director as well as Mohsin Issa and Gary Lindsay as directors of the combined business. The Board continues its recruitment process for a permanent chief executive.

It is the intention of the Asda Board to add new independent non-executive directors to the Board to ensure continued strong corporate governance.

Asda Express Interior