Asda Reportedly Finalizing £10B Merger Deal With EG Group

Asda is reportedly in the midst of finalizing its merger agreement with UK-based EG Group, which operates filling stations, fast-food outlets, and convenience stores. Reportedly, the deal will include more than £500 million of debt funding from Apollo Global Management.

According to Sky News, the owners of Asda, Mohsin and Zuber Issa, and TDR Capital are in the final stages of completing their merger deal with the EG Group, which was founded by Zuber Issa as well. Once the deal is completed, the incorporation of Asda and EG UK is expected to create a massive company that employs around 170,000 workers and has an annual revenue of nearly £30 billion.

Overall, once everything is finalized, the combined companies will operate around 600 supermarkets, 100 convenience stores, and 700 petrol forecourts. In financial terms, this is set to be the biggest deal in the entire business career of Baron Rose of Monewden, the chairman of both EG and Asda. Previously, he led Marks & Spencer and the Ocado Group.

The Baron and shareholders of the companies are expected to make use of the merger to strengthen Asda's push into the convenience store industry. In any case, sources said that Apollo Global Management was confirmed to give over £500 million as part of the funding to finance the deal.

"Having a bigger and better convenience proposition across such a vast network and utilizing Asda's brand positioning makes enormous sense during a cost-of-living crisis," an executive from a rival company said.

Meanwhile, competition regulators are still keeping close tabs on any possible implications that the merger of Asda and EG Group will have in the industry since they are both controlled by the same shareholders when the former acquired the latter from Walmart for £6.8 billion.

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