// Asda owners consider merger of grocer and UK petrol forecourts business
// The deal would mean the business would have more than 581 supermarkets, 700 petrol forecourts and 100 convenience stores
Asda owner Issa brothers are considering a merger of the grocer and their UK petrol forecourts business, in a deal that would value the business at over £10 billion.
The merger talks are being held before a crunch refinancing at the brothers’ EG Group, which has £7 billion of debt falling due in 2025, The Times reported.
The deal, which is said to be worth between £11 billion and £13 billion, would mean the business would have more than 581 supermarkets, 700 petrol forecourts and 100 convenience stores in the UK.
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Bankers at Barclays and Rothschild are understood to be advising on the potential deal.
The Issa brothers expect to be able to refinance their £7 billion debt on better terms with the combination of the two profitable businesses.
However, the deal could be pushed back by the government if it means pump prices would increase.
After plans for the merger were revealed, the small business minister Kevin Hollinrake said the business secretary Grant Shapps had “already raised concerns about fuel prices with the CMA and directly with retailers and we would consider very carefully anything that might undermine competitive market forces”.
The CMA has not confirmed whether it would investigate the potential transaction.
The Issa brothers and TDR bought Asda two years ago in a £6.8 billion leveraged buyout.
Since then, Asda has been investing in value and convenience. As well as launching its own convenience format, Asda Express, the grocer has been working with the Issa brothers’ EG Group to rollout Asda on the Move, a format that sells Asda products on petrol station forecourts.
It also refreshed its Just Essentials value range, specifically designed to provide customers with everything they need to keep the household running within their budget.
