Billionaire petrol station tycoons Issa brothers complete £6.8bn takeover of Asda from Walmart

Billionaire petrol station tycoons the Issa brothers and their private equity backers have today completed their £6.8billion acquisition of Asda, returning the supermarket giant to British ownership after more than 20 years.

The EG Group, owned by Mohsin and Zuber Issa, previously reached an agreement to acquire the chain from Walmart. 

The deal, which is being backed by investment funds managed by TDR Capital, will also include its chain of petrol forecourts.  

The brothers secured FCA approval for the takeover last week. However, the deal still needs to secure approval by UK competition regulators.

The brothers, who are worth an estimated £3.56bn, sent ripples through the City when they were named as the frontrunners for the takeover last year. 

The children of immigrants who moved to Blackburn from Gujurat, India, in the 1970s, Mohsin and Zuber now have franchise agreements with brands including Starbucks, Subway and KFC. 

The Blackburn-born siblings were recently locked in secret talks to buy Topshop before it became part of the Asos portfolio.  

The Issa brothers’ estate includes a £25m Kensington townhouse and a private jet that is kept in a hangar at Blackpool Airport alongside Donald Trump’s personal helicopter.

They are also building five identical mansions just three miles from the £115,000 Blackburn two-up two-down where they were raised. Mohsin is expected to live there with his wife, Shamim with whom he shares two grown-up children. 

In a separate announcement today, the Competition and Markets Authority (CMA) said it has set April 20 as a deadline for its preliminary decision on the move.

In October, the suitors announced the deal to buy the majority stake in the UK’s third biggest grocery, although previous owner Asda will still hold a minority stake.

The CMA launched an investigation in December and initially set a February 18 deadline for its Phase One probe, before pushing its timetable back in order to look at additional documentation.

Since the inquiry was launched, the Issa brothers and TDR have confirmed plans to sell Asda’s petrol forecourt business to its own EG Group for £750million.

The CMA will also consider the forecourt deal as part of its inquiries.

The update also comes days after the new owners completed a £2.75billion junk bond sale to help fund the Asda acquisition.

Competition lawyers expect the deal to be given the go-ahead by the regulator.

It comes almost two years after Asda’s attempted merger with rival Sainsbury’s was halted by the CMA.

It is thought Walmart was wooed by the Issas’ entrepreneurial flair and the potential to put Asda convenience stores in EG’s petrol stations.

Walmart is looking to sell most of its stake in Asda to focus on defending its position in the US against Amazon and pursue opportunities in higher growth markets, such as India. 

From a terraced home in Blackburn to self-made billionaires on the brink of buying Asda: The rags-to-riches story of petrol station pioneer brothers

By Rory Tingle for MailOnline 

Mohsin Issa, 49, and his brother Zuber, 48, whose parents came to Britain from India ‘with nothing’, built EG Group from one site bought for £150,000 in 2001 into a £9billion giant employing 44,000 staff. 

The brothers are now worth an estimated £3.56bn, including a £25m Kensington townhouse and a private jet that is kept in a hangar at Blackpool Airport alongside Donald Trump’s personal helicopter.  

They are also building five identical mansions just three miles from the £115,000 Blackburn two-up two-down where they were raised. Mohsin is expected to live there with his wife, Shamim with whom he shares two grown-up children.  

As the children of immigrants who moved to Blackburn from Gujurat, India, in the 1970s, Mohsin and Zuber Issa – who were born in the former mill town – quickly learned the importance of hard work. 

Their first experience of business was selling petrol from their parents’ filling station, where they would have their big idea that would revolutionise the industry and make their millions. 

Petrol sales were in decline and fuel duty on the rise, cutting into already wafer-thin fuel margins and leading to hundreds of operators leaving the market.

At the time most garages – if they sold food at all – offered a measly selection of pre-packaged sandwiches, crisps, sweets and chocolate.

But the Issas realised fuel sales still had a purpose in creating a captive market at petrol stations, who could then be offered appetising food rather than the gruel offered elsewhere

The brothers struck franchise agreements with brands including Starbucks, Subway and KFC, before embarking on a buying spree to snap up sites that had previously become vacant.

They now own Europe’s largest forecourt operator, Euro Garages, which in 2019 reported revenues of more than £17.9bn.

The firm is now the largest Subway franchisee in Europe and earlier this year bought a group of 146 KFC stores.

Describing the secret of their success, Zuber told the Financial Times: ‘We wanted to create a destination where you could get fuel, food-to-go and shopping.

‘This is the formula and it works. 

‘We were fortunate that the big players were leaving the market just as we were growing.’

TDR Capital – a London investment firm behind We Buy Any Car and David Lloyd gyms – bought a 50% stake in EG Group in 2015. 

The Issas retain the remaining 50%.

This prompted a debt-fuelled buying spree that saw the brothers buy thousands of new sites and expand into eight other countries around the world.

‘They never in their wildest dreams would have imagined 5,500 gas stations in nine markets,’ senior executive Ilyas Munshi told the American trade magazine CSP last year.

‘If they had only 20 sites, they would have felt they had done their job.’

As proud Lancastrians, the brothers have insisted on keeping EG Group’s headquarters in Blackburn, and recently unveiled a new £35m headquarters.

‘People are always asking when we will move to London or Manchester,’ Zuber told the FT.

‘But the quality of life here is great. A lot of people do a few years in London then come to the North West.

‘They want to raise a family and have less pressure. We have got a lot of fantastic people that way.’

Mohsin has a wife Shamim, and their son and a daughter both work for EG.

Both brothers rarely give interviews and have adopted a low-key public profile. 

They are now building five identical ‘super-sized’ homes three miles from their childhood home.

Despite the fierce opposition, which saw the council face 30 letters of complaint, eight old houses have now been demolished and builders have laid foundations for the five 5,000 sq ft mansions.

Plans for the large houses, which are located on a quiet rural road outside Blackburn where houses sell for up to £1 million, were lodged in April 2018.

They sparked an uproar, with the properties described as ‘not in fitting with the local area’ as the homes stand over 4.5 metres taller with 1,500 square metres of floor space.

But planning permission was granted and pictures taken earlier this year showed builders had already moved in.

In 2017, the pair purchased a £25million mansion in Knightsbridge, which estate agents said could be worth £80million when planned renovations are carried out according to estate agents.

Their Grade II listed Georgian house is also at the centre of a long-running planning row.

The previous owner began digging a basement and left a vast 30ft-deep crater the size of two tennis courts, described by horrified neighbours to ‘Hitler’s bunker’.

When finished the luxury 22,000 sq ft home will have a huge underground car park, a swimming pool, spa, and cinema. 

The brothers donate 2.5% of their earnings to charity through the Issa Foundation, which funds hospitals and provides free breakfasts for children in Lancashire.