EG Group Founders Acquire Walmart's U.K. Supermarket Business

LEEDS, U.K. and BENTONVILLE, Ark. — EG Group founders and co-CEOs Moshin and Zuber Issa and private equity firm TDR Capital LLP are acquiring Walmart Inc.'s supermarket chain, Asda.

Headquartered in Leeds, Asda operates 341 locations across the United Kingdom. The $8.8 billion deal is $2.3 billion less that what Walmart paid for Asda in 1999, Convenience Store News' sister publication Progressive Grocer reported.

Under the new ownership structure, the Issa brothers and TDR Capital will acquire a majority ownership stake in Asda. Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.

The sale comes after Walmart said last year that it was mulling a future stock market listing for Asda after its attempted merger with competing U.K. grocer Sainsbury’s was blocked by regulators, according to PG.

Asda will remain headquartered in Leeds and the business will continue to be led by Roger Burnley who will form part of Asda's board alongside representatives appointed by the Issa brothers, TDR Capital and Walmart.

According to a press release from Walmart, under its new owners, Asda will:

  • Invest more than $1 billion in the next three years to further strengthen the business and its supply chain;
  • Continue to offer low prices across its stores and product categories for its customers;
  • Ensure it remains a price leader in the supermarket fuel sector;
  • Increase the proportion of U.K.-based suppliers, increasing the volume of products — such as chicken, dairy, wheat and potatoes — purchased from U.K. suppliers each year, as well as a commitment to source 100 percent British beef;
  • Enjoy the continued support and involvement of Walmart as an investor and partner, allowing Asda access to global innovation and buying power; and
  • Maintain its commitment to its Create Change for Better program, which helps people living below the poverty line in the UK and supports local communities, among other good causes.

"We are very proud to be investing in Asda, an iconic British business that we have admired for many years. Asda's customer-centric philosophy, focus on operational excellence and commitment to the communities in which it operates are the same values that we have built EG Group on," the Issa brothers said. "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.

"We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy," they added. "After a successful period as part of Walmart we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the U.K." 

Bentonville-based Walmart operates more than 11,300 stores under 58 banners in 27 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide.

Founded in 2001 by the Issa family, Blackburn, U.K.-based EG Group is a major gasoline forecourt retail convenience operator that has established partnerships with global brands. It has approximately 5,200 sites in Europe, the United States and Australia.

EG Group entered the U.S. in April 2018 when it acquired The Kroger Co.'s convenience store portfolio, which comprised more than 760 c-stores operating under the Turkey Hill, Loaf 'N Jug, Kwik Shop, Tom Thumb, and Quik Stop banners. A year later, it acquired Cumberland Farms, based in Westborough, Mass.

Convenience Store News and Progressive Grocer are properties of EnsembleIQ.