Asda cancels £750 million plans to sell forecourt business
New information had caused Asda and EG Group to reassess their assumptions, they said.
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Your support makes all the difference.The billionaire brothers who took over Asda earlier this year have abandoned a £750 million plan to fold the company’s petrol forecourts into their filling station empire.
Asda and the EG Group said they had decided to terminate the deal on Monday after new information came to light.
The deal was first agreed in February, but it was not until June that the two companies could start sharing commercial information.
Neither side revealed what had caused the change of heart, but said that something in this information had sparked a rethink.
“This allowed Asda and EG Group’s teams to start sharing commercial information relating to EG’s acquisition of the Asda forecourt business which had not been previously possible and has resulted in several changes to the financial evaluation of the proposed transaction,” Asda and EG said.
“As a result, EG and Asda have decided they will no longer proceed with the transaction.”
The Issa brothers, Zuber and Mohsin, made their money through the EG Group, a petrol station business that has 6,000 sites in the UK and Europe.
They were catapulted into the public eye last year after launching, and later winning, a £6.8 billion takeover of Asda.
They teamed up with private equity firm TDR Capital to buy the retailer from US giant Walmart.
The deal that would have seen Asda’s forecourts bought by EG Group was cancelled on Monday, but the two companies still plan to work together.
Asda’s on the move range will be rolled out across EG’s forecourts in the UK.
It will establish 28 new Asda convenience stores at EG’s forecourts this year, and reach 200 next year.
EG said: “These plans remain unchanged, and the company continues to anticipate synergies as a result of its growing relationship with Asda.”
Asda added: “Asda will retain the petrol forecourts business and the associated revenue and EBITDA (earnings before interest, taxes, depreciation, and amortisation).
“The forecourts have been an important footfall driver to the business, supported by its position as a price leader in the supermarket fuel sector.”