Asda is buying 350 petrol stations and 1,000 convenience stores in the UK and Ireland from sister company EG Group in a deal worth £2.27bn. The acquisition will give rise to a new entity with a total turnover of nearly GBP30 billion (USD38 billion).

Asda is the third largest supermarket in the UK and, like EG, is owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital. EG Group currently operates approximately 350 petrol stations and more than 1,000 forecourts. Asda already owns 438 petrol stations, including 129 stations it acquired from the Co-op for £600m last year. To finance the acquisition, Asda will raise a GBP770 million loan from buyout group Apollo and GBP1.1 billion through the sale and leaseback of certain outlets. In addition, Mohsin and Zuber Issa, together with TDR Capital, will provide approximately GBP450 million in additional capital.

This will create a colossal entity with approximately 170,000 employees, nearly 600 supermarkets and 700 petrol stations. The purchase of Asda in 2020 by the Issa brothers and TDR was the largest leveraged acquisition in the UK in a decade. According to recent findings by the Financial Times, the Issa brothers and TDR contributed a modest sum of just £200m to the acquisition of Asda, which was valued at £6.8bn.