// Asda has bought EG Group’s UK and Irish operation for £2.27bn
// Lord Rose, who chairs both firms, said the deal created “a consumer champion like the UK has never seen”
Asda has confirmed it has bought the UK operations of petrol station giant EG Group, which is also owned by the Issa brothers and TDR Capital, in a £2.27bn deal.
The grocer’s chair Lord Rose said the deal would create “a consumer champion like the UK has never seen”.
The deal includes 350 petrol stations and more than 1,000 food-to-go sites. It plans to roll out the Asda Express convenience format across the EG UK and Ireland estate.
The grocer also vowed to have the lowest supermarket fuel prices after the deal.
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Asda will invest more than £150m within the next three years to “fully integrate the combined business” with shareholders, providing £45m of additional equity to fund the transaction.
The merged business will have almost £30bn sales with EG UK and Ireland contributing £195m EBITDA to the group after rents.
The business expects to realise synergies of £100m over the next three years. Asda also expects to find more than £100m of working capital benefits due to its larger scale.
Rose said: “Throughout my career in retail one thing has always been true – that meeting the evolving needs of customers is the route to growth.
“This transaction is all about driving growth by bringing Asda’s heritage in value to even more communities and accelerating the growth of its convenience retail business.”
Asda co-owner Mohsin Issa added: “Asda is committed to saving customer precious time and money across their shopping baskets and on the forecourt.”
The combination of Asda and EG UK and Ireland will be positive news for motorists, as “we will be able to bring Asda’s highly competitive fuel offer to even more customers”.
Last month, the GMB union warned that the merger could “threaten food supply, fuel prices and 100,000 jobs”.
The union urged business secretary Kemi Badenoch to call in the Competition and Markers Authority (CMA) to fully investigate the merger.
It is understood that the CMA will not investigate the deal as it already considers Asda and EG Group to be the same company due to its shared ownership.
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