Walmart to sell majority stake in Asda to Issa bros and TDR Capital

Walmart has agreed to divest a majority stake in British supermarket retailer Asda to the Issa brothers and investment funds managed by TDR Capital for an enterprise value of £6.8 billion.

The Issa brothers are founders and co-CEOs of EG Group, a UK-based convenience and forecourts retailer.

Walmart will hold on to an equity investment in Asda, with an ongoing commercial relationship and a seat on the board of the British supermarket retailer.

Established in 1949, Asda has a multi-format, omni-channel offering. The British supermarket chain has a network of 584 grocery stores, 18 independent petrol filling stations, and 33 Asda Living stores, and also online.

Walmart had acquired Asda in 1999 for £6.7 billion.

Judith McKenna – President and CEO of Walmart International said: “We are delighted to be able to announce this deal today, which we believe creates the right ownership structure for Asda, building on its 71 year-heritage, whilst bringing a new entrepreneurial flair, not only to Asda, but also to UK retailing.

“I’m delighted that Walmart will retain a significant financial stake, a board seat, and will continue as a strategic partner. Asda has been a powerhouse of innovation for the rest of the Walmart world, and we look forward to continuing to learn from them in the future. This important combination will continue to keep customers and colleagues at Asda’s heart, which is important to us all.”

Walmart to sell majority stake in British supermarket retailer Asda to Issa brothers and TDR Capital. Photo courtesy of Walmart Inc.

According to Walmart, Asda will continue to be based in Leeds. Besides, the business will continue to be headed by Roger Burnley who will be part of Asda’s board alongside representatives appointed by the Issa brothers, TDR Capital, and the US retailing giant.

Under the new ownership, Asda is expected to see an investment of more than £1 billion in the next three years for further consolidating its business and supply chain.

Mohsin Issa and Zuber Issa said: “Asda’s customer-centric philosophy, focus on operational excellence and commitment to the communities in which it operates are the same values that we have built EG Group on.

“Asda’s performance through the COVID-19 pandemic has demonstrated the fundamental strength and resilience of the business, and we are excited to support Roger and his team as they continue to reposition the business to drive long-term growth.”

The deal, which is subject to regulatory approvals, is likely to be wrapped up in H1 2021.