The existing Asda management team will continue to drive the current growth strategy, with ongoing access to Walmart’s global sourcing scale and innovation

The existing Asda management team will continue to drive the current growth strategy, with ongoing access to Walmart’s global sourcing scale and innovation

US retail giant Walmart is to sell its UK supermarket chain Asda to the Issa brothers, founders and co-CEOs of EG Group, a global convenience and forecourts retailer, and private equity firm TDR Capital for GBP6.8bn (US$8.8bn).

Announcing the deal today (2 October), Walmart said the new British ownership will accelerate Asda's strategy and build on the retailer's low-price heritage.

The Issa brothers and TDR Capital are acquiring a majority ownership stake in Asda, which operates the successful George clothing line. Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.

Asda will remain headquartered in Leeds and will continue to be led by Roger Burnley, who will form part of Asda's board alongside representatives appointed by the Issa brothers, TDR Capital and Walmart.

Under its new owners, the business will invest more than GBP1bn over the next three years in Asda to further strengthen the business and its supply chain.

"In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth," Burnley said. 

Mohsin and Zuber Issa added: "We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy.

"After a successful period as part of Walmart we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the UK."

The transaction is subject to regulatory approvals and is expected to complete in the first half of 2021.

The news comes after reports last month claimed two private equity firms – both fronted by retail veterans – were preparing to place bids for a stake in Asda.

Walmart reported an increase of US$7.4bn, or 5.6%, in total revenue to US$137.7bn for the second quarter, while consolidated net income attributable to Walmart increased 79.4% on last year to $6.5bn from $3.6bn.