Esso EG sold to ASDA

EG Group, which counts the Esso filling station on Churchill Way, Macclesfield, amongst it’s 5,500 sites has sold nearly all of its UK assets to Asda for an enterprise value of £2.27bn. 

EG Group is controlled by the Issa Brothers, Zuber and Mohsin Issa, who also hold a controlling interest in ASDA

The proceeds from the deal and the recent £1.4bn sale and leaseback of assets in the US  is intended to pay off debt, which rising interest rates had made even more expensive to service.

In a statement the brothers insisted the deal will lead to further rollouts of foodservice, grocery and merchandise to create multi-purpose convenience retail sites across its estate including EV chargers, under its proprietary brand, evpoint, across the existing site network, as well as third-party locations. 

The Waterside offices in Blackburn, UK, will remain as the global headquarters and shared service centre for the Group. 

Asda is jointly owned by the Issa brothers, investment funds managed by TDR Capital LLP and Walmart is acquiring the EG business through an affiliate of its parent company, Bellis Acquisition Company 3 Limited, a wholly-owned subsidiary of the Asda Group.

On Asda’s side, the retailer plans to invest more than £150m within the next three years to fully integrate the combined business. As part of the transaction the shareholders are providing c. £450m of additional equity to fund the transaction.

The business will still consist of operations in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium, whilst also retaining c. 30 UK sites – including the first Euro Garages site in Bury – which are close to the Group headquarters and frequently used to trial innovation. 

The Cooplands bakery business and certain other foodservice brands will also be retained. The Group will remain a leading global convenience retailer, generating over $25bn of annual revenue and more than $1bn of EBITDA, across 5,500 locations, underpinned by c. $6bn of freehold property.