EG Group has announced an agreement to sell to Asda the majority of its United Kingdom and Ireland fuel, foodservice, grocery and merchandise business for an enterprise value of $2.8 billion.
This transaction is a transformational step for EG Group and strengthens its platform to further invest in its proven and successful strategy to roll out foodservice, grocery and merchandise to create multi-purpose convenience retail sites across its estate. EG Group will also accelerate its strategy to deploy emerging fuels and electric vehicle (EV) chargers, under its proprietary brand, evpoint, across the existing site network, as well as third-party locations.
“This transaction with Asda represents an important strategic step for EG Group. Following this sale, EG Group will benefit from a significantly strengthened balance sheet, supporting the continued rollout of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience,” said Zuber Issa CBE, co-founder and co-CEO of EG Group. “This includes the ongoing investment and expansion of our EV charging business, evpoint, as well as hydrogen and other sustainable fuel retail infrastructure, which we continue to see as a significant future opportunity.”
The proceeds, together with the net proceeds of $1.4 billion from the recent sale and leaseback transaction in the U.S., will be used to repay debt, and EG Group’s net leverage will fall to below five times, in line with the recently announced financial policy and deleveraging strategy. In due course, EG Group will look to address upcoming maturities and put in place a capital structure for the medium term, as communicated on the Q4 2022 results call. EG Group remains committed to achieving a net leverage multiple of mid four times in the near term.
“I am confident the UK&I business will go from strength to strength under Asda’s ownership. Over the last 22 years, we have built a business that I am extremely proud of, and EG Group will continue to maintain an important base in the U.K., supporting the global business from our home in Blackburn,” said Issa. “I want to thank all of our colleagues across the business for their hard work and dedication over the years, and we now look forward to continuing to develop and execute our successful strategy.”
EG Group will continue to operate in the U.S., Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium while also retaining 30 United Kingdom sites — including the first Euro Garages site in Bury — which are close to EG Group headquarters and frequently used to trial innovation. The Cooplands bakery business and certain other foodservice brands will also be retained.
“Zuber and Mohsin Issa have spent the last two decades creating the best convenience retailing business in the U.K. Their journey from one site to creating a global business has been extraordinary and reflects their vision and ability to be a genuine disruptor in the forecourts market, turning these locations into destinations in their own right with food, coffee and convenience. Following this deal, they will remain in nine countries, with an even stronger business, which is able to focus on international growth,” said Stuart Rose, chairman of EG Group.
EG Group generates over $25 billion of annual revenue across 5,500 locations, underpinned by $6 billion of freehold property. The Waterside offices in Blackburn, United Kingdom, will remain the global headquarters and shared service center for EG Group. The transaction is expected to complete in Q4 2023.
Founded in 2001 by the Issa Family, United Kingdom-based EG Group is a petrol forecourt retail convenience operator which has established partnerships with global brands. EG Group currently employs about 50,000 colleagues working in more than 6,200 sites across the U.K. and Ireland, Europe, U.S., and Australia.
