Tue, 19 Oct 2021 | BUSINESS NEWS
EG Group has announced that its planned £750 million acquisition of Asda’s petrol forecourts has been abandoned. The group said that the deal has been terminated after the two businesses shared commercial information with each other.
The group is owned by the Issa brothers, who acquired Asda’s supermarket chain last year in a highly-leveraged takeover alongside private equity firm TDR Capital. A deal for Asda to sell its forecourts business to EG Group was first announced in February, with the reported intention of the £750 million proceeds helping to fund the takeover of the supermarket chain.
However, the deal was held up due to UK competition law, which restricted the two parties from disclosing information to each other. This restriction was lifted in June, enabling the two businesses to begin sharing commercial information relating to the deal.
As a result of the commercial information shared, the acquisition has now been terminated. The termination will see Asda retain the business, sales and profits of its petrol forecourts. EG Group, meanwhile, will redeem a £675 million bond issued to finance the deal.
The collapse of the deal leaves the Issa Brothers and TDR requiring £750 million to complete the Asda takeover. In a statement, Asda said that this would come from £500 million in debt and £250 million from its own balance sheet.
EG Group commented: “Key commercial initiatives between EG and Asda are already well under way, including the development of plans to introduce foodservice at Asda locations and the expansion of Asda’s convenience offering, where both companies have confirmed their intention to roll out the Asda on the Move proposition across EG’s UK forecourts.”
“These plans remain unchanged and the company continues to anticipate synergies as a result of its growing relationship with Asda.”
EG Group recently boosted its forecourts business with the acquisition of bakery chain Cooplands, which it plans to integrate into its petrol station offering.
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