Asda is finalising £10bn merger with EG Group, Sky News reports
Sky News said that the billionaire Issa Brothers are planning to combine the UK arm of EG Group, a company which they founded, with Asda, which they bought in 2020 for £6.8bn.
It would create a massive company with revenues of around £30bn and 170,000 employees.
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Hide AdSky said that together with TDR Capital, the brothers were putting the finishing touches to the potential tie-up and were expected to announce the deal on Friday.
They already own both of the businesses.
A tie-up between Asda and EG Group’s UK division has been mooted for months.
They already have the same owners but by merging the two it could help the forecourt group, which has heavy debts.
EG needs to find a way to refinance its £7bn debt pile by 2025 and due to recent interest rate hikes, that could prove expensive.
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Hide AdBy merging the two, the Issa Brothers hope they can secure a better refinancing deal.
But critics, including the GMB union, have warned that it would lump a portion of that debt onto Asda, which already owes around £4.7 billion, according to reports.
EG Group and Asda declined to comment.
Sky said that Apollo Global Management, an asset manager which was also in the running to buy Asda in 2020, will provide half-a-billion pounds of debt to finance the deal. The deal will be an acquisition of EG UK by Asda, Sky added.