Billionaires merge Asda with petrol giant in £2bn deal

Move sparks fears of fuel price hikes and job cuts

REGULATORS plan to probe asda’s £2.3bn deal for a petrol station operator amid fears it could push up fuel prices.

the supermarket chain will snap up eg group’s UK and Irish businesses, creating a company with revenues of nearly £30bn and 170,000 employees, in a swoop masterminded by the Issa brothers.

the deal, which values the combined group at £10bn, ends months of speculation about what asda owners the Issa brothers would do with its petrol business, which has been looking to slash its £7bn debt pile.

But the combination of asda and eg group will bring together 600 supermarkets, 700 petrol stations and 100 convenience stores – raising questions about competition on petrol prices.

although the deal does not qualify for a full regulatory merger review in the UK, with both firms being coowned by the brothers and private equity firm TDA Capital, it will fall into the UK competition watchdog’s fuel pricing probe.

earlier this month, the Competition and Markets authority (CMA) said it will question supermarket bosses after finding evidence that retailers have increased fuel prices to unnecessarily high levels.

It found soaring pump prices could not be solely blamed on global factors, such as Russia’s invasion of ukraine, and is investigating whether ‘any failure in competition’ is leaving consumers paying more.

Pressure group FairFueluK said this could be a potential obstacle for asda.

‘the CMA has asda in their sights with regard to manipulating pump prices as wholesale costs have plummeted,’ said FairFueluK founder Howard Cox.

He also flagged concerns about asda’s pricing in the face of eg’s debt pile, calling on the competition regulator to take a stand.

‘the CMA must stop this latest merger so lower priced supermarket fill up choices are not lost to drivers by the weight of the greedy eg’s much higher pump prices,’ Cox said.

‘UK diesel and petrol prices are already dishonestly higher than necessary. the eg’s latest business shenanigans will keep them that way, unless the CMA acts to stop this deal going ahead.’

and the tie-up has also sounded alarm bells amongst unions, which are worried the deal will lead to heavy job cuts.

In a letter to stuart Rose, chairman of both asda and eg, Nadine Houghton, GMB national officer, said she had a ‘deep concern’ about the merger.

‘Is this the beginning of a wholesale assault on the pay of working people across asda?’ she asked.

there had been rumours of a tie-up between asda and the eg group since the Issa brothers bought the supermarket for £6.8bn in 2020. they swooped on asda after former owner Walmart’s plan to sell it to sainsbury’s was blocked.

Zuber Issa said eg joining with asda was ‘an important strategic step’. Meanwhile retail veteran Rose said: ‘asda’s acquisition of eg UK and Ireland will create a consumer champion like the UK has never seen.’

Rose told reporters the grocer will ‘still be the price leader in the UK on petrol’.

It is unclear who will head up the combined group, but sources have suggested that Imran Nawaz, chief financial officer of tesco, and shirine Khoury-Haq, finance boss of Co-op, could be in the running.