The EG Group has announced it has completed the sale of the majority of its UK and Ireland business to Asda for £2bn. 

The company will continue to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium as well as 32 sites in the UK. 

Brothers, Zuber and Mohsin Issa took over Asda in 2020. The deal to tie-up the companies had been announced in May this year and had been priced as £2.27bn.

Under the terms of the transaction, the company will also retain certain foodservice brands including Cooplands, its wholly-owned bakery business, as well as franchise businesses with the Starbucks, KFC, Sbarro, Chaiiwala and Cinnabon brands.

The group said it will also continue its strategy ‘to deploy emerging fuels and EV chargers, under its proprietary brand, evpoint, across the existing site network, as well as third-party locations’.

The $2.5bn (£2bn) proceeds from this transaction will be used together with the net proceeds of $1.4bn from the recent sale and lease back transaction in the US and the $43m net proceeds from the non-core US asset disposal to repay debt.

The Waterside offices in Blackburn, UK, will remain as the global headquarters and shared service centre for the Group.

Co-CEO and co-founder of EG Group, Zuber Issa CBE, said: “The sale of the majority of EG Group’s UK business to Asda represents an important strategic step for the company, enabling EG to support the continued roll out of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience. 

“This includes the ongoing investment and expansion of the EV charging business, evpoint, as well as hydrogen and other sustainable fuel retail infrastructure, which we continue to see as a significant future opportunity. 

“Following this transaction and the successful extension of the debt maturities to February 2028, EG Group will benefit from a sustainable capital structure from which to build for the future. 

“I would like to thank all EG colleagues for their continued hard work and thank those who are transferring to Asda for their contribution to the success of EG and wish them well for the future. We look forward to executing our 2024 strategy with confidence.”

Chairman of the EG Group, Lord Stuart Rose. said: “The transaction is an important milestone for both companies.  

"EG Group can focus on international growth underpinned by its strengthened balance sheet, whilst Asda can accelerate its convenience rollout on proven, well-invested sites.

“There is now a clear opportunity to grow and build the international business whilst ensuring EG plays a pivotal role in the energy transition.”

The company said the completion of the UK transaction would allow the Group to complete the process to amend and extend the remaining $3.2bn of its term loans through the extension of the maturity date to February 2028, which was priced and allocated in June. 

The EG Group also announced the launch of up to a $500m Term Loan B add-on to existing term loans due February 2028 (the "transaction"), with further refinancing to follow. Proceeds from the transaction will be used to partially refinance the remaining 2025 maturities.