UK supermarket chain Asda has agreed to purchase the majority of UK-based petrol forecourt convenience retailer EG Group’s UK and Ireland fuel, foodservice, grocery and merchandise business.
The sale – valued at £2.27 billion – is said to be a “transformational” step for EG Group, as it strengthens its platform to further invest in its strategy to roll out foodservice, grocery and merchandise to create multi-purpose convenience retail sites across its estate.
The deal will also accelerate EG Group’s strategy to deploy emerging fuels and EV chargers under its proprietary brand, evpoint, across the existing site network and third-party locations.
According to EG Group, it “will continue to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium, whilst also retaining [around] 30 UK sites – including the first Euro Garages site in Bury – which are close to the Group headquarters and frequently used to trial innovation”.
EG Group says it will remain a leading global convenience retailer, “generating over $25 billion of annual revenue and more than $1 billion of EBITDA, across 5,500 locations, underpinned by [around] $6 billion of freehold property”.
Zuber Issa, co-founder and co-CEO of EG Group, said: “Following this sale, EG Group will benefit from a significantly strengthened balance sheet, supporting the continued rollout of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience. This includes the ongoing investment and expansion of our EV charging business…as well as hydrogen and other sustainable fuel retail infrastructure, which we continue to see as a significant future opportunity.”
Stuart Rose, chairman of EG Group, added: “[EG Group’s co-founders] have spent the last two decades creating the best convenience retailing business in the UK. Their journey from one site to creating a global business has been extraordinary and reflects their vision and ability to be a genuine disruptor in the forecourts market, turning these locations into destinations in their own right with food, coffee and convenience. Following this deal, they will remain in nine countries, with an even stronger business, which is able to focus on international growth.”
Gary Lindsay, managing partner at TDR Capital, commented: “The sale of the EG UK&I business to Asda makes strategic sense for both parties and will enable EG Group to accelerate its growth in key markets including Europe, the US and Australia. The group has developed a successful blueprint in the UK for developing one-stop shop sites which combine convenience retail, fuel and foodservice, and there are significant value creation opportunities from rolling out this model, across the global estate.”
The transaction is expected to complete in Q4 2023.
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