LONDON: US retail giant Walmart has agreed to sell its British supermarket chain Asda to billionaire brothers and a private equity group for £6.8 billion ($8.7 billion, 7.4 billion euros), they announced Friday. The Issa brothers, who run petrol stations and food outlets worldwide, have joined with private equity firm TDR Capital to purchase Asda, which last year regulators blocked from merging with British supermarket group Sainsbury's.

While the brothers and TDR are acquiring a majority stake in Asda, Walmart will retain an investment and have a seat on the new board, a statement said. "I'm delighted that Walmart will retain a significant financial stake… and will continue as a strategic partner," said Judith McKenna, CEO of Walmart International. Mohsin and Zuber Issa said "Asda's performance through the Covid-19 pandemic has demonstrated the fundamental strength and resilience of the business".

The transaction, subject to regulatory approvals, is expected to complete in the first half of next year. "We are proud to be investing alongside Mohsin and Zuber, who have built EG Group into a global convenience retailer," said Gary Lindsay, a partner at TDR Capital. Walmart bought Asda in 1999. "In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth," said Asda chief executive Roger Burnley. While the UK has shed tens of thousands of jobs during the coronavirus pandemic, the country's supermarket sector has embarked on a huge recruitment drive to meet surging demand for online food shopping.

"Considering the Issa brothers and TDR Capital are already present in forecourt retail through Euro Garages, we would expect them to try to achieve synergies by bringing the Asda brand and products into their forecourts," said research group Euromonitor. "This also fits with the current consumer trend towards more top-up shopping in smaller outlets." Fraser McKevitt, head of retail and and consumer insight at data group Kantar, said there had been "substantial growth in convenience (store) sales during the pandemic". He added: "If people continue to work from home more in future, then grocers with a bigger local store presence could benefit."

Family business
Born in the town of Blackburn, northwest England, the Issas began their careers working in their father's local petrol station, Friday's statement said. They bought their first petrol station in 2001, which was the start of Euro Garages and which has grown into an international group running 6,000 sites across three continents. Founded in 1965, Asda has the third biggest market share among supermarket chains in the UK, behind Sainsbury's and the UK's largest retailer Tesco. Recent data showed that Asda's online sales doubled in the second quarter when Britain was in lockdown. -AFP