Asda Group has announced the acquisition of EG Group’s UK and Ireland operations, as part of its growth plans within convenience.
The £2.27bn deal includes 350 petrol filling station sites and over 1,000 food-to-go locations. The EG Group will retain approximately 30 petrol filling station sites in the UK for wider group development and which will not form part of the transaction. The deal is expected to close in Q4 2023.
As part of the transaction, Asda intends to bring all acquired EG UK&I sites under the Asda fascia. 166 EG sites have already been converted to ‘Asda on the Move’. These are in addition to Asda’s acquisition of 119 convenience sites with attached petrol filling stations from the Co-Op Group and the launch of three stand-alone Asda Express convenience sites since October 2022, with plans to open 300 of these stores by the end of 2026.
Asda cited the rise of local shopping as consumers adapt to hybrid work patterns; immediate consumption and same day meals; stores being at the heart of communities and consumers increasingly prioritising food to go and takeaway options due to busy lifestyles as key drivers for focusing on convenience.
Commenting on the acquisition, chair of Asda Stuart Rose, said: “Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen. Throughout my career in retail – one thing has always been true, that meeting the evolving needs of customers is the route to growth.
“This transaction is all about driving growth by bringing Asda’s heritage in value to even more communities and accelerating the growth of its convenience retail business.
“Zuber and Mohsin Issa have spent the last two decades creating the best convenience retailing business in the UK. Their journey from one site to creating a global business has been extraordinary and reflects their vision, and ability to be a genuine disruptor in the forecourts market, turning these locations into destinations in their own right with food, coffee and convenience. Following this deal, they will remain in nine countries, with an even stronger business, which is able to focus on international growth.”
As well as the 30 sites it is retaining in the UK and Ireland, EG Group will continue to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium. It plans to use the proceeds from the deal to repay debt and reduce the Group’s net leverage, as well as accelerate its strategy to deploy emerging fuels and EV chargers, under its proprietary brand, evpoint, across the existing site network, as well as third-party locations. EG Group’s Waterside offices in Blackburn, UK, will remain as the global headquarters and shared service centre.
Zuber Issa CBE, co-founder and co-CEO of EG Group, commented: “This transaction with Asda represents an important strategic step for EG Group. Following this sale, EG Group will benefit from a significantly strengthened balance sheet, supporting the continued roll out of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience. This includes the ongoing investment and expansion of our EV charging business, evpoint, as well as hydrogen and other sustainable fuel retail infrastructure, which we continue to see as a significant future opportunity.
Mohsin Issa, co-owner of Asda, added: “Asda is committed to saving customers precious time and money across their shopping baskets and on the forecourt. The combination of Asda and EG UK&I will be positive news for motorists, as we will be able to bring Asda’s highly competitive fuel offer to even more customers.”
Mohsin Issa will continue to lead Asda through its ongoing transformation programme and integration of the EG UK&I business however a formal search of global talent to identify a new CEO of Asda is now underway.
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