Retail giant Walmart has agreed to sell its British supermarket chain, Asda, to investors behind a multinational group of petrol stations and grocery shops, EG Group in a deal worth $8.8 billion.
According to the joint statement, together with TDR Capital investors, Brothers Mohsin and Zuber Issa founders and co-chief executives of petrol station retailer EG Group will get a majority of Asda, while Walmart will hold a minority stake and a board seat. Details of the deal have not revealed.
Walmart owns Asda since 1999 has been searching for a buyer recently to concentrate on higher-growth markets. Over the past 15 years, Walmart, headquartered in Bentonville, Arkansas, has provided upon operations in many foreign markets, including South Korea and Germany.
Judith McKenna, president and chief executive Walmart International said, “Asda has been a powerhouse of innovation for the rest of the Walmart world, and we look forward to continuing to learn from them in the future”.
The offer comes over a year after regulators rejected a £7.3 billion bid by rival supermarket giant Sainsbury’s to buy Asda in the face of fears that the combined business would dominate the retail industry in Britain. This year, Walmart resumed promotional talks for the store again.
Roger Burnley, chief executive, Asda said, “In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth”.
The new owners promised that Asda will remain based in Leeds, England, and dedicated themselves to keeping prices low in the face of difficult economic conditions and possible new tariffs on food imported into the EU after Brexit.
“Asda’s performance through the Covid-19 pandemic has demonstrated the fundamental strength and resilience of the business, and we are excited to support Roger and his team as they continue to reposition the business to drive long-term growth,” the Issa Brothers said in a statement.
The Issa Brothers are the proprietors of Euro Garages, which, in Europe, North America and Australia, has over 6,000 gas stations and convenience stores. In its back-court activities, EG Company markets branded fuel from Esso, BP, Shell and Texaco and has a partnership with brands such as KFC, Burger King, Spar, Subway, Carrefour, Louis Delhaize, Starbucks and Greggs.