The billionaire brothers behind Asda have formalised the break-up of their business empire, clearing the way for private equity giant TDR Capital to take majority control of Britain’s third-largest supermarket.
It was announced on Friday that Zuber Issa had agreed to offload his 22.5pc stake in Asda to TDR, which will now own 67.5pc of the business.
The £500m deal will mean a further disentangling of fortunes between Mohsin and Zuber Issa, as the latter has stepped back from running both Asda and EG Group – the brothers’ petrol forecourts business.
Unlike Zuber, Mohsin will remain a key shareholder in Asda with his original 22.5pc stake, while former owner Walmart will hold the remaining 10pc.
It comes after Mohsin and Zuber bought Asda for £6.8bn in 2021.
The agreement thrust the pair into the limelight after they had built their fortune through EG Group, which they founded in Bury more than 20 years ago.
Just last year, Asda bought the bulk of EG Group’s UK petrol stations in a £2.3bn deal, and it announced on Friday that the remaining sites will be sold to Zuber for £228m.
The latest separation will mean Zuber steps down as co-chief executive of EG Group, leaving Mohsin as the sole person in charge.
Zuber said he will now set up his own business to run the group of forecourts he has bought, with EG Group using cash from the deal to pay down debt.
Union bosses on Friday raised concerns over TDR holding a bigger chunk of Asda, saying private equity ownership “has already been bad for consumers – and bad for staff, with millions of working hours cut from the shop floor”.
GMB national officer Nadine Houghton said: “Further involvement from TDR can only spell more bad news. Bosses must change course to protect Asda workers and stop this British retailer from further losing more market share.”
Asda responded to criticism by saying its shareholders have “invested significantly to set the business up for long-term success”, including increasing pay for workers.
It said: “With more than 18 million customers a week, Asda is a highly cash-generative business and this underpins the supermarket’s ability to pay down debt, while continuing to invest in colleagues and new customer propositions.”
Zuber’s decision to quit Asda comes after The Telegraph first revealed his ambition to sell his stake in the supermarket earlier this year.
On Friday, he said: “With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours.”
Mohsin said: “Given our shared background in building great businesses, the board and everyone at EG understands Zuber’s desire to return to his entrepreneurial UK roots by acquiring the remaining UK forecourt business including new-to-industry developments and certain standalone food service concessions – as well as dedicating more time to his family and our charitable activities.”
It comes after talks of a rift between the brothers, something Mohsin denied in an interview last year when he said the pair were on good terms and spoke daily.
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