// Asda is set to merge with petrol station giant EG Group in a £10bn deal
// The pair already share the same owners, the Issa brothers and TDR Capital
The owners of Asda are finalising a merger of the supermarket with their petrol station business EG Group, which will create a £10bn business.
The Issa brothers and TDR Capital, the private equity firm that co-owns both firms, are set to announce the deal today (26 May), according to Sky News.
Asda is expected to pay £1.25bn for EG’s UK business with the credit arm of Apollo Global Management lined up to lend the supermarket £500m to help finance the deal.
The firm is expected to use the deal to ramp up Asda’s convenience store expansion. The grocer, which is a late comer to the world of c-stores, has plans to open 300 convenience stores by the end of 2026.
The proceeds of the deal will enable EG pay down its onerous debt burden, which has surged due to rising interest rates.
EG has around £7bn of debt that is reportedly due to be repaid in 2025.
Merging the two firms will create a business with 600 supermarkets, 700 petrol forecourts and 100 convenience stores. Annual sales of the group will be around £30bn.
The deal is not expected to be probed by the Competition and Markets Authority, which already considers the two businesses as one because of their shared ownership. The pair also share the same chair in former M&S boss Lord Rose.
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However, the GMB union has urged the secretary of state to use her “unique powers” to intervene and order an investigation.
GMB national officer Nadine Houghton said: “By refusing to use these powers she is turning her back on hard working communities who rely on healthy competition in the food and fuel market – as well as turning her back on thousands of Asda workers who need job security,” she said.
Houghton added that the merger is “wrong on so many levels”, claiming that it “will increase food prices,” and will have a “chilling effect on fuel prices”.
“The only people this deal benefits are the super wealthy elite pulling the strings at the top of Asda and EG Group.”
Houghton also flagged the union’s concerns that “rising interest rates will leave the debt of the UK’s third largest retailer unsustainable”.
No significant redundancies are expected as a result of the merger with Asda expected to retain its Leeds headquarters and EG its Blackburn base.
However, last month Bloomberg said the merger would generate more than £100m of synergies between the two firms.
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