Asda owners to announce 10 billion-pound merger with EG UK -Sky News
LONDON (Reuters) - The owners of supermarket Asda and petrol stations company EG Group will announce a 10 billion-pound ($12.6 billion) merger of their operations in Britain as early as Friday, Sky News reported on Thursday.
Asda, Britain's third-largest grocer, and EG are both owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital.
Asda, TDR and EG declined to comment on the report.
Talks about a combination of Asda and EG UK were initially reported by The Sunday Times back in January.
The entirety of EG Group, which also operates in the United States and Australia, ended 2022 with net debt of $9.6 billion, while Asda ended the year with debt of 4 billion pounds.
Sky News said the merged group will operate nearly 600 supermarkets, 700 petrol forecourts and 100 convenience stores and have revenue close to 30 billion pounds.
It said the deal would accelerate Asda's drive into the convenience store sector.
Asda, which trails market leader Tesco and Sainsbury's, has a 13.9% share of Britain's grocery market, according to researcher Kantar.
Its stated goal is to overtake Sainsbury's and become Britain's No. 2 grocer. Sainsbury's has a 14.8% share.
In March, Asda reported a 24% fall in annual earnings.
($1 = 0.7923 pounds)
(Reporting by Hani Kollathodi in Bengaluru and James Davey in London; Editing by Sharon Singleton)