Issa brothers and TDR Capital complete £6.8bn Asda acquisition

The Issa brothers and private equity firm TDR Capital have completed the acquisition of Asda from Walmart for an enterprise value of £6.8bn.
Competition lawyers anticipate the combined group having to dispose of some Asda petrol forecourtsCompetition lawyers anticipate the combined group having to dispose of some Asda petrol forecourts
Competition lawyers anticipate the combined group having to dispose of some Asda petrol forecourts

The brothers and TDR have bought a majority ownership stake in the Leeds-based supermarket chain, while Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board. The deal was announced in October.

The transaction is still subject to regulatory approval. The Competition and Markets Authority (CMA) has set a April 20 deadline for a ruling. The brothers and TDR said they remain confident of a positive outcome.

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In October, Zuber and Mohsin Issa and private equity firm TDR Capital, agreed to buy a majority stake in Asda, Britain’s third largest grocer.

In December the CMA launched an inquiry into the deal.

It initially set a February 18 deadline for a Phase 1 decision but then stopped the clock of its probe while it sought additional documentation.

The Issa brothers and TDR Capital plan to offload Asda’s 322 petrol stations to their own petrol forecourt business EG Group for £750m when the deal is completed.

The petrol forecourts deal, under which the stations will continue to be branded Asda, will be considered by the CMA as part of its review of the Asda purchase.

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At the end of the Phase 1 stage, the CMA will either clear the deal, ask the parties to offer “undertakings in lieu” or concessions to avoid a more detailed Phase 2 investigation, or refer the deal to a Phase 2 probe.

Competition lawyers expect the deal to be cleared at Phase 1, but anticipate the combined group having to dispose of some petrol forecourts.

Asda is due to update on fourth quarter trading on Thursday.

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