The owners of supermarket chain Asda are set to announce the finalisation of their M&A deal with their petrol station empire, EG. While the deal would create a giant company with an operation of 600 supermarkets, 700 petrol forecourts, and 100 convenience stores, concerns have been raised by the GMB Union, which cites the merger as solely benefitting private equity firms and business partners. In light of this, Claire Trachet, M&A expert and CEO and founder of business advisory, Trachet, comments on the implications of the merger and how it will impact the M&A market.
The owners of Asda – the Issa Brothers – plan to merge their supermarket giant with the UK arm of EG group, a company they founded and bought them £6.8bn in 2020. The merger would help create revenues of approximately £30bn and 170,000 employees. According to Kantar, Asda has a 13.9% share of the UK’s grocery market and aims to overtake Sainsbury’s, which holds a 14.8% share. The deal could also help the Issa Brothers secure an improved refinancing deal for the £7bn debt pile they need to refinance.
However, concerns have been raised by the GMB union, which has urged the CMA to look over the deal. The union expressed they do not believe the merger will positively impact the UK economy, the workers, or consumers. Instead, they believe it will solely suit private equity firms and their business partners, in securing an arrangement for debt refinancing.
