TDR Capital agrees to take majority control of one of the largest private sector employers in Northern Ireland

Private equity firm TDR Capital is to become the majority owner of Asda after agreeing to acquire Zuber Issa’s shares in the supermarket group.

In a separate announcement, EG Group confirmed that it has agreed to sell its remaining UK forecourt business and certain foodservice locations to co-founder Zuber Issa for £228m.

Zuber will step down as co-CEO of EG Group, with Mohsin Issa continuing to lead the business as sole CEO.

Mohsin Issa remains a co-owner in Asda alongside TDR Capital. This brings the ownership of Asda to 67.5% by TDR Capital, 22.5% by Mohsin Issa, and 10% by Walmart Inc. The transaction is set to complete in Q3 2024.

TDR Capital invested in Asda alongside the Issa brothers, and together they took majority ownership of the business in June 2021. Since then, together with the other shareholders, TDR has supported Asda to accelerate its strategy, with a particular focus on delivering low prices to customers and expanding into the fast-growing convenience retail segment.

Asda is one of the largest private sector employers in Northern Ireland. The last official measure of its workforce in 2021, put its headcount at 3,728.

Gary Lindsay and Tom Mitchell, managing partners of TDR Capital, said: "We first invested into Asda over three years ago, seeing a huge opportunity to cement its position as one of the UK’s leading retail brands."

"By combining our investment and sector expertise with Asda’s heritage of delivering value for customers, we have already made significant progress in transforming Asda. We have added a scale convenience business, grown Asda’s store footprint from 623 to 1,200 stores and food-to-go sites, and launched a hugely successful loyalty app, which now has six million active customers, accounting for around half of total sales.

"We remain focused on investing in Asda’s stores and online, as well as its colleagues through the highest pay in the traditional supermarket sector, to drive sustainable, long-term growth."

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Asda chairman Stuart Rose, added: "On behalf of the Board, I welcome TDR’s increased investment in Asda – which is a clear sign of its commitment to the business. Asda’s heritage is in delivering great value for customers on a daily basis across its entire proposition from groceries to fashion and food-to-go – and the Board has never been more committed to deliver on this promise. The Board and shareholders continue to put in place the building blocks to position Asda for long-term success and that is good news for colleagues, customers, suppliers and other business partners.”

Mohsin Issa, co-owner of Asda, explained: "As a shareholder group, we are excited about the growth journey we are on. Asda is an iconic British brand and we are committed to setting it up for long-term success and delivering great value for customers across the UK. To that end, I am incredibly proud of the investments we have already made in transforming the Asda business, including the launch of the new Asda Express convenience format, the Asda Rewards customer loyalty scheme and the £800m investment in a best in class IT infrastructure to bring new data and insight capabilities.

"Above all, I am proud and grateful for the everyday commitment and loyalty of our Asda colleagues and their dedication to our customers. I also want to add my personal support and best wishes for Zuber’s plans as we continue our successful family partnership, working as partners on our personal co-investments, family office philanthropy and Issa Foundation projects."

Zuber Issa, co-founder and co-CEO of EG Group, continued: "Since Mohsin and I, alongside TDR, took ownership of Asda, we have driven a period of significant investment and entrepreneurial growth activity.

"Notably, Asda acquired a market-leading UK convenience retail and foodservice store business from EG Group. With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours. I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions."

In a separate announcement, EG Group has agreed to sell its remaining UK forecourt business and certain standalone foodservice locations to Zuber Issa.

On completion of the transaction, Zuber will step down as co-CEO of EG Group, with Mohsin Issa continuing to lead the business as sole CEO. Zuber will retain his existing shareholding in the company and remain on the board as a non-executive director. TDR Capital and Mohsin’s shareholdings in EG Group also remain unchanged.

Lord Stuart Rose, chairman of EG Group, said: "On behalf of the board of EG Group, I would like to thank Zuber for his incredible leadership, which has been central to building one of the largest and most entrepreneurial private companies in the UK. EG Group is a UK success story on the global stage that has created significant opportunities for people in Blackburn and other local communities in the Group’s international markets – and pioneered the foodservice model at the roadside.

"With Mohsin remaining as sole CEO, the business is in the right hands and well-placed for further success. I look forward to continuing to work with Mohsin and Zuber on the Board of EG Group as we focus on growing the international business and ensuring EG plays a key role in the energy transition.”

Mohsin Issa CBE and Zuber Issa CBE, co-founders and Co-CEOs of EG Group, stated: "We have had an amazing journey together building EG Group over the last 20 years and we look forward to continuing to work closely together as fellow board members and shareholders in EG Group.

"The company is well positioned for future growth and success, with a strong international portfolio and a growing EV business. We are both – and the wider board – laser-focused on our key growth opportunities. Encouragingly, following the significant progress to strengthen our balance sheet, we have a capital structure which allows us to take advantage of the opportunities ahead of us continuing to deliver our best-in-class services to our customers around the world."

They added: "Given our shared background in building great businesses, the Board and everyone at EG understand Zuber’s desire to return to his entrepreneurial UK roots by acquiring the remaining UK forecourt business including new to-industry developments and certain standalone food service concessions – as well as dedicating more time to his family and our charitable activities."

The transaction is expected to complete in the second half of 2024.

As CEO of EG Group, Mohsin will continue to lead the company, working with the business’ experienced senior management team.

EG Group has also today announced the appointment of Russell Colaco as Group chief financial officer. He will succeed Michael Bradley who has decided to step down to pursue other opportunities.

Zuber and Mohsin co-founded EG Group in 2001 and under their leadership, the business has grown from a single site in the north of England to a global company with more than 5,500 locations.

Skadden, Arps, Slate and Meagher & Flom (UK) LLP, Rothschild & Co, EY and PwC supported EG Group on the transaction.

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