ASDA sold to billionaire Issa brothers in £6.8bn deal
October 2, 2020
ASDA is returning to British ownership for the first time in 21 years after Walmart agreed terms for the £6.8 billion sale of the 3rd largest Supermarket chain in UK to Billionaire owners of British petrol forecourts operator, Euro Garages (EG Group).
Walmart confirmed that it has accepted a bid from a consortium led by Lancashire-based brothers Mohsin and Zuber Issa of EG Group.
The Issa Brothers once worked at their parents’ petrol station. Now they own 6,000 forecourts in 10 countries.
Mohsin and Zuber Issa were cleaning the toilets at their parents’ petrol station, they say, when they hit upon the idea of transforming the filling station into a “shopping destination”.
In their teens, the brothers recognised there was little profit to be made from selling fuel, but that on the forecourt they had a captive market of motorists with little to choose from beyond sweets, crisps and unappetising packs of sandwiches.
Their parents, Vali and Zubeda, who had moved to Bradford from Gujurat, India, in the 1970s to work in the textile industry, soon sold that petrol station. But the brothers, now 48 and 49, saved £150,000 and in 2001 bought their own forecourt in Bury, Greater Manchester, to test their idea of offering a wide range of fresh food and healthy snacks.
Their timing was spot on, with the big oil companies trying to offload their forecourts. The brothers took on those tired petrol stations and installed branches of Spar, Carrefour and other supermarket chains alongside Subway outlets, Burger King, Greggs and KFC. In 2010, the brothers’ EG Group opened the UK’s first Starbucks drive-through. They now operate 110 Starbucks stores, and are the largest franchise operator of KFC in the UK, with 125 outlets.
EG Group has borrowed big to build: it has £8bn of debt. However, it is now Europe’s largest petrol station operator, and has expanded to the US and Australia. The business has become the UK’s second-largest privately owned company , raking in more than £18bn a year in sales.
The brothers are thought to be sitting on a £3.5bn fortune, according to the Sunday Times rich list, which ranks them as the 43rd-richest people in Britain.
While the UK makes up just a quarter of the company’s sales, EG Group is very much a British company. Or more specifically a Blackburn company.
The brothers have teamed up with the private equity firm TDR Capital, which already owns the other half of EG Group, in their audacious £6.8bn deal to buy the UK’s third-largest supermarket chain.
Born in a two-up, two-down terraced home, the brothers are currently upgrading to five identical mansions on the outskirts of the city. Eight existing homes have been demolished to make way for the mansions, prompting fierce opposition from local residents who have criticised the scope of the “monstrous McMansions”.
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