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Zuber Issa, who owns Asda with his brother Mohsin, has agreed to sell his stake in the UK supermarket chain to co-owner TDR Capital in a deal that will make the private equity firm the majority owner of the business.
Mohsin, who runs Asda on a day-to-day basis, has a 22.5 per cent stake, while TDR will own 67.5 per cent of the company after a deal to buy Zuber’s 22.5 per cent stake, estimated to be worth £500m, is completed in 2013 . third quarter of this year. Previous owner Walmart, which sold the supermarket in a £6.8bn deal agreed in 2020, has a 10 per cent stake.
The sale formalises a split between the billionaire brothers, which will see Zuber not only leave Asda – the UK’s third largest supermarket chain – but also step back from EG Group, the petrol station business he and Mohsin founded in Blackburn in 2001.
Lord Stuart Rose, chairman of the supermarket, said he welcomed TDR’s “increased investment in Asda”, adding that it was a “clear sign of its commitment to the business”.
Asda is looking for an Executive Director for Business Management.
The transaction comes after intense public and political scrutiny of the Issa brothers, who built a retail empire from scratch with the backing of TDR. He also co-owns EG Group, along with a private equity firm whose fortunes have become intertwined with those of Asda since the acquisition.
In a further move to settle the asset split between the siblings, EG Group also confirmed on Friday that it would sell its remaining UK forecourt business to Zuber for £228m, carrying out a plan first reported by the Financial Times in March. Earlier this year, Mohsin dismissed speculation of a rift with Zuber, saying in an interview with the BBC that the pair were getting on “exceptionally well”.
Zuber said on Friday that after selling off his Asda shares, he would “turn my attention to running and managing the remaining EG UK yards, which I have personally acquired, and spend more time on my charitable endeavours”.
He will step down as co-chief executive of EG Group, with Mohsin continuing to lead the business as sole boss. Zuber will retain his existing stake in the company and remain on the board as a non-executive director.
TDR said it “will continue to work closely with Asda’s management team and colleagues across the business to support an ambitious strategy that we believe is the right one to continue to drive Asda forward”.
Founded in 2002 by ex-bankers Manjit Dal and Stephen Robertson, the private equity firm has become one of the UK’s leading investment groups, managing more than €15 billion.
TDR helped fund EG Group’s transformation into a global retail empire.
In 2020, TDR made another big bet alongside the Issa brothers when they agreed to acquire Asda in a £6.8bn deal at the height of the leveraged buyout boom.
The deal faced scrutiny from lawmakers over the debt load the company assumed as part of the takeover.
In January, TDR managing partner Gary Lindsay was summoned to appear before the UK Parliament’s Trade and Commerce Committee, where he was questioned about the controversial deal and the treatment of Asda workers, among other issues.
Under TDR and owned by Issa’s brother, Asda decided to diversify its source of income from its core supermarket business by launching convenience stores. As part of its growth plans last year, Asda announced a £2 billion takeover of EG Group’s UK and Irish operations.
As well as increasing its stake in Asda, TDR also recently bought a majority stake in the UK franchise rights of fast food chain Popeyes UK as well as pet retailer Jollyes.