Asda sold in €7.5bn deal

Asda will be back under British ownership for the first time since 1999.

Britain’s billionaire Issa brothers and private equity group TDR Capital have bought Asda from Walmart in a deal which gives the British supermarket chain an enterprise value of $8.8bn (€7.5bn) and the buyers a platform to roll out smaller stores.

Mohsin and Zuber Issa, who founded petrol station operator EG Group nearly two decades ago, are taking Asda back under British ownership for the first time since 1999, when US retail giant Walmart paid £6.7bn for it.

“The Issa brothers have a reputation for good brand partnerships, for convenience and for growth and that’s really what we were interested in for Asda,” Judith McKenna, president and CEO of Walmart International said.

Ms McKenna said the deal was not about job cuts and the new owners said they are targeting growth by expanding into convenience shops from its large supermarket and online operations, bringing Asda more in line with market leader Tesco number two Sainsbury's.

The Issas said they wanted to utilise their experience to help “build a differentiated business” at Britain’s third-biggest supermarket chain, in which Walmart will retain an unspecified minority stake, as well as a commercial relationship and a board seat.

British retail veteran Roger Burnley will remain as CEO of Asda in a deal which ratings agency Moody’s said allows Walmart to continue to refocus its international efforts on markets with more long-term upside, such as India and China.

-Reuters