Walmart agrees sale of majority stake to Issa brothers and TDR Capital in a £6.8b deal.
Asda is returning to British ownership for the first time in 21 years, after parent company Walmart agreed terms for the £6.8b sale with the Issa brothers and TDR Capital. Under the new ownership structure, the Issa brothers and TDR Capital will acquire a majority ownership stake in Asda, with equal shareholdings. Walmart will retain an ongoing equity investment as part of the agreement, along with an ongoing commercial relationship and a seat on the board.
The new owners will keep Asda’s headquarters in Leeds, and have agreed to support the existing management team and maintain competitive pay levels for shop floor staff. They have promised a £1b investment over the next three years to further strengthen Asda’s business and its supply chain, and grow its convenience and online operations.
Walmart chief executive Judith McKenna commented: “We are delighted to be able to announce this deal, 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.”
Asda chief executive Roger Burnley added: “With our combined investment, expertise and ambition; Asda, Walmart, the Issa brothers and TDR have an incredible opportunity to accelerate our existing strategy and develop an even more exciting offer for our customers as well as strengthen our business for our colleagues. In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth.”
Mohsin and Zuber Issa, who own petrol forecourt firm EG Group, said: “We are very proud to be investing in Asda, an iconic British business that we have admired for many years. 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 still needs to pass through regulators, it is expected to be completed by the first half of 2021.