Indian-origin billionaire brothers Mohsin and Zuber Issa are set to acquire a majority stake in the leading UK supermarket chain Asda from its US owner Walmart after a $8.8-billion deal was struck as part of a consortium involving private equity firm TDR Capital.
The Issa brothers, whose parents moved to the UK from Gujarat in the 1970s, own the Euro Garages chain of petrol stations as part of their EG Group business.
The supermarket deal, valued at around 6.8-billion pounds ($8.8-billion), follows an auction process for Asda over several months and returns the 71-year-old supermarket company back into British ownership after 21 years, a development welcomed by UK Chancellor Rishi Sunak.
"Great to see Asda returning to majority UK ownership for the first time in two decades today," Sunak said on Twitter, reported Livemint.
"The new owners have already committed to investing over GBP 1 billion in the next three years and increasing the proportion of UK-based suppliers. I wish them the best of luck," he said.
Announcing the deal, Walmart said Asda would keep its headquarters in Leeds in northern England, with chief executive Roger Burnley continuing to be in charge.
"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," Mohsin and Zuber Issa said in a statement.
The brothers, born in Blackburn in north-west England, pledged support for the long-term growth of the supermarket as they praised the chain's performance during the Covid-19 pandemic, demonstrating the "fundamental strength and resilience" of the business.
"We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy."
"After a successful period as part of Walmart, we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the UK," they said.
Robert Burnley welcomed the new ownership as an exciting new chapter and committed to delivering value to customers.
"In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth. For Asda colleagues, a strong and growing business is important for our long-term future," said Burnley.
Walmart retains an equity investment in the business with an ongoing commercial relationship and a seat on the board.
The deal, which is subject to regulatory approvals, is expected to be completed in the first half of 2021.