Asda confirms £10bn merger with petrol stations group EG

theguardian.com:

Asda has announced it is to acquire the petrol forecourts and convenience store operations in the UK and Ireland of its sister business, EG Group, in a deal worth £2.27bn.

The long-awaited tie-up of the two groups, both owned by the billionaire Issa brothers and the private equity firm TDR Capital, is expected to create a combined business worth about £10bn and will allow the supermarket to expand further into convenience retail.

Under the deal, Asda is buying about 350 petrol station sites and more than 1,000 convenience store locations, meaning the new group will operate about 640 supermarkets, 700 petrol forecourts and 100 convenience stores.

The combined group is expected to serve about 21 million customers every week and will have revenues of nearly £30bn. Both businesses are chaired by the former Marks & Spencer boss Stuart Rose.

Under the deal, EG employees at the sites being sold will transition over to Asda, a move that was criticised in advance by the GMB union, which represents thousands of Asda staff and which called it a bad deal for workers.

EG will keep about 30 petrol stations in the UK – including the first Euro Garages site in Bury, close to its Blackburn headquarters – which it intends to develop separately. It will also keep its Cooplands bakery business and other food service brands.

The deal is not expected to be scrutinised by the competition watchdog, the Competition and Markets Authority (CMA), as it already considers the two businesses to be one because of their shared ownership.

Before the deal, the brothers, Mohsin and Zuber Issa, were co-chief executives of EG Group, the business they founded in 2001 and which has more than 6,000 sites worldwide. Mohsin Issa will continue to lead Asda, while the