Issa brothers complete GBP 6.8 billion acquisition of Asda from Walmart

  • Issa brothers & TDR Capital confirm the completion of the acquisition of Asda from Walmart
  • The transaction received approval from the FCA on February 8 & all deal conditions have been met in full
  • It still needs clearance from the CMA – but the new owners are confident of a positive outcome

By guest author Elias Jahshan from Retail Gazette

Caption courtesy by Retail Gazette

The billionaire Issa brothers and their private equity partners have confirmed that their GBP 6.8 billion acquisition of Asda from Walmart is now complete.

This means Mohsin and Zuber Issa, co-chief executives of global convenience and forecourts retailer EG Group, together with investment funds managed by TDR Capital have acquired a majority ownership stake in Asda.

Walmart will retain an equity investment in the Big 4 grocer, with an ongoing commercial relationship and a seat on the board.

The transaction received approval from the Financial Conduct Authority on February 8 and the parties involved in the acquisition said all deal conditions have been met in full.

While the CMA is yet to have confirmed its regulatory approval, which is expected in the second quarter of this year, the parties remain confident of a positive outcome..

The update comes a few days after EG Group and TDR Capital carried out a record sterling junk bond sale to help fund their acquisition of Asda.

According to the Financial Times, they sold GBP 2.75 billion worth of debt through the bond.

The bond was part of the debt arrangements and asset disposals to plug the GBP 6.8 billion takeover of Asda, and meant the buyers only needed inject a small amount of equity themselves.

Meanwhile earlier this month new owners of Asda have said they would take on around GBP 3.5 billion of debt financing, sell its petrol station business and have plans to sell distribution sites once the takeover is cleared by the CMA.

Mohsin and Zuber Issa said the company would launch a loan facility worth EUR 840 million (GBP 730 million), and issue around GBP 2.75 billion in loan notes to help finance the acquisition.

EG Group also confirmed it had agreed to buy Asda’s forecourt business in a deal worth GBP 750 million as part of the financial restructuring. They will retail the Asda branding.

EG Group currently operates more than 6000 forecourts globally.

News of Asda returning to British ownership for the first time in 21 years was first announced in October last year.