Asda and petrol station giant EG Group are set to unveil a £10bn merger, which will combine the two businesses.
The Issa brothers and TDR Capital, which co-own the two businesses, are set to announce the deal today (26 May), according to Sky News.
Asda is expected to pay £1.25bn for EG’s UK business. The credit arm of Apollo Global Management will help finance the deal by providing a £500m loan to the supermarket.
The deal will help accelerate Asda’s convenience store expansion. The grocer has plans to open 300 c-stores by the end of 2026.
Meanwhile, EG will use the proceeds of the deal to pay off some of its £7bn debt, which is understood to be due for repayment in 2025.
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Despite the merger creating a business with 600 supermarkets, 700 petrol forecourts and 100 convenience stores, it is understood that the Competition and Markets Authority will not investigate the deal as it already considers the two businesses as one because of their shared ownership.
However, the GMB union last week branded the trade secretary “tin-earned” for not intervening over the merger and urged her to use her “unique powers” to order an investigation.
GMB national officer Nadine Houghton said: “By refusing to use these powers she is turning her back on hard working communities who rely on healthy competition in the food and fuel market – as well as turning her back on thousands of Asda workers who need job security,” she said.
Houghton added that the merger is “wrong on so many levels”, claiming that it “will increase food prices,” and will have a “chilling effect on fuel prices”.
“The only people this deal benefits are the super wealthy elite pulling the strings at the top of Asda and EG Group.”
Houghton also raised concerns that “rising interest rates will leave the debt of the UK’s third largest retailer unsustainable”.
No significant redundancies are expected as a result of the merger with Asda expected to retain its Leeds headquarters and EG its Blackburn base.
