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Zuber Issa, who owns Asda with his brother Mohsin, has agreed to sell his stake in the British supermarket chain to co-owners TDR Capital in a deal that will make the private equity firm the majority owner of the business.
Mohsin, who runs Asda day-to-day, has a 22.5 per cent stake, while TDR will own 67.5 per cent of the company after the deal to buy Zuber’s 22.5 per cent stake — estimated to be worth about £500mn — completes in the 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 that will see Zuber not only exit Asda — the UK’s third-largest supermarket chain — but also take a step back from EG Group, the petrol station business he and Mohsin founded in Blackburn in 2001.
Lord Stuart Rose, the supermarket’s chair, said he welcomed “TDR’s increased investment in Asda”, adding that it was “a clear sign of its commitment to the business”.
Asda is searching for a chief executive to run the business.
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. They also co-own EG Group alongside the private equity firm, whose fortunes have become entwined with Asda’s since the acquisition.
In a further step to neaten the division of assets between the siblings, EG Group also confirmed on Friday that it would divest its remaining UK forecourt business to Zuber for £228mn, executing a plan first reported by the Financial Times in March. Earlier this year, Mohsin dismissed speculation about a rift with Zuber, saying the pair got on “exceptionally well” in a BBC interview.
Zuber said on Friday that with the divestment of his shares in Asda, he would “turn his attention towards leading and managing the remaining EG UK forecourt sites that 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 chief. Zuber will retain his existing shareholding in the company and remain on the board as a non-executive director.
TDR said it would “continue to work closely with the Asda management team and colleagues across the business to support the ambitious strategy, which we believe is the right one to continue to move Asda forward”.
Founded in 2002 by former bankers Manjit Dale and Stephen Robertson, the private equity firm has become one of the UK’s most prominent investment groups, managing more than €15bn.
TDR helped finance the transformation of EG Group into a global retail empire.
In 2020, TDR made another large bet alongside the Issa brothers when they agreed to acquire Asda in a £6.8bn deal at the peak of a boom in leveraged buyouts.
The deal has faced scrutiny from lawmakers over the debt load the company assumed as part of the takeover.
In January, TDR managing partner Gary Lindsay was called to appear in front of the UK parliament’s business and trade committee, where he was questioned about the controversial deal and the treatment of Asda workers among other things.
Under TDR and the Issa brother’s ownership, Asda has moved to diversify its income stream from its core supermarket business by launching convenience stores. As part of its growth plans, last year Asda announced a £2bn takeover of the UK and Irish operations of EG Group.
As well as upping 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.
