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Zuber Issa, who co-owns Asda with his brother Mohsin, has agreed to sell his stake in the British supermarket chain to co-owner TDR Capital in a deal that will see the private equity firm become the company’s majority shareholder.
Mohsin, who runs Asda day-to-day, has a 22.5 per cent stake, while TDR will own 67.5 per cent of the company after the deal to acquire Zuber’s 22.5 per cent stake – estimated to be worth around £500 million – will be completed in the coming years. third quarter of this year. Previous owner Walmart, which sold the supermarket in a £6.8 billion deal agreed in 2020, has a 10 percent stake.
The sale formalizes a rift between the billionaire brothers, which will see Zuber not only leave Asda – Britain’s third-largest supermarket chain – but also step back from EG Group, the petrol station company he and Mohsin founded in Blackburn in 2001. have founded.
Lord Stuart Rose, chairman of the supermarket, said he welcomed “TDR’s increased investment in Asda”, adding that it was “a clear sign of its commitment to the business”.
Asda is looking for a CEO to lead the company.
The transaction comes after intense public and political scrutiny of the Issa brothers, who built a retail empire from scratch with the support of TDR. They are also co-owners of EG Group, alongside the private equity firm, whose fortunes have become intertwined with Asda’s since the takeover.
In a further move to simplify the division of assets between the siblings, EG Group also confirmed on Friday that it would divest its remaining UK petrol station business to Zuber for £228m, implementing a plan first reported by the Financial Times in March. Earlier this year, Mohsin dismissed speculation about a rift with Zuber, saying the pair got along “exceptionally well” in a BBC interview.
Zuber said on Friday that by selling his shares in Asda he would “focus his attention on running and managing the remaining EG UK petrol stations that I have personally acquired and devote more time to my charitable efforts”.
He will step down as co-chief executive of EG Group, while Mohsin will continue to lead the company as sole head. Zuber will retain his existing shareholding in the company and remain on the board as a non-executive director.
TDR said it would “continue to work closely with the Asda management team and colleagues across the business to support the ambitious strategy, which we believe is the right one to take Asda forward”.
Founded in 2002 by former bankers Manjit Dale and Stephen Robertson, the private equity firm has grown into one of Britain’s most prominent investment groups, managing more than €15 billion.
TDR helped finance EG Group’s transformation into a global retail empire.
In 2020, TDR made another big gamble alongside the Issa brothers when they agreed to acquire Asda in a £6.8 billion deal at the height of a leveraged buyout boom.
The deal has drawn criticism from lawmakers over the debt load the company took on as part of the acquisition.
In January, TDR managing partner Gary Lindsay was summoned to appear before the UK Parliament’s business and trade committee, where he was questioned, among other things, about the controversial deal and the treatment of Asda employees.
Under TDR and Issa brother ownership, Asda has taken steps to diversify its revenue stream from its core supermarket business by launching convenience stores. As part of its growth plans, Asda last year announced a £2 billion acquisition of EG Group’s UK and Irish operations.
As well as increasing its stake in Asda, TDR also recently bought a majority stake in the UK franchise rights of fast food chain Popeyes UK and pet retailer Jollyes.