EG Group, co-founded by a key investor in Asda, has divested its Italian operations in a transaction valuing the business at €425m (£367m).
The Blackburn-based firm has finalised an agreement with a consortium of seasoned Italian operators including PAD Multienergy S.p.A., Vega Carburanti S.p.A., Toil S.p.A., Dilella Invest S.p.A. and GIAP s.r.l., as reported by .
EG Group described the sale as "another positive step" in its strategy to concentrate on key markets and enhance its financial position, according to a company statement.
Established by the billionaire Issa brothers, Mohsin and Zuber, EG Group is now jointly owned with private equity behemoth TDR Capital.
Russ Colaco, CEO of EG Group, commented: "We remain relentlessly focused on driving forward EG group's growth strategy."
He further elaborated on the deal's strategic fit: "This important transaction is fully aligned with this strategy, as we continue to focus on our core markets with the greatest growth potential and deliver on our deleveraging programme."
Colaco also acknowledged the efforts of the Italian team: "We are grateful to our colleagues in Italy for their hard work and dedication, and we wish the business continued success in the future."
This development follows Zuber Issa's suggestion to the Financial Times that EG Group should consider selling its US division rather than pursuing an IPO for the entire group in New York.
In a statement regarding the deal, the consortium said: "The acquisition of EG Italia allows us to generate new and key synergies for the development of the fuel stations network with the expansion of the services offered also with a view to the energy transition."
"The EG network together with the networks of the Consortium members, all leaders in their reference territories, will enhance the know-how and skills of the EG Italia organisation, heir to the culture of Esso Italiana since 2018."
The completion of the transaction is contingent on antitrust and other regulatory approvals, with finalisation anticipated by the close of 2025.
BofA Securities served as exclusive financial advisors and A&O Shearman as legal advisors to EG Group for this transaction.
Profit almost wiped out at EG Group
In June, City AM disclosed that EG Group's pre-tax profit had been drastically cut from $1.4bn to a mere $10m in 2024.
EG Group attributed the alteration in its pre-tax profit to being "largely driven by the material exceptional gain that the group reported following the divestment of the majority of the º£½ÇÊÓƵ business in October 2023 and the profit from the USA sale and leaseback transaction which completed in May 2023".
Excluding these exceptional items, the group posted a pre-tax loss of $195m, but it managed to turn a profit of $205m from divestments.
In 2023, the group recorded a pre-tax loss of $125m before exceptional items, which generated a profit of $1.5bn.
In the autumn of 2023, the group finalized a deal to sell its remaining º£½ÇÊÓƵ forecourt business and select foodservice sites to co-founder Zuber Issa for £228m.
Subsequent to the transaction, Zuber Issa resigned from his position as co-chief executive and transitioned into a non-executive director role.
Simultaneously, Zuber Issa offloaded his Asda shares to TDR Capital, thereby making the private equity behemoth the majority stakeholder. Moshin continues to hold a substantial share in Asda.
The financial results also revealed that EG Group's revenue plummeted from $28.3bn to $24.1m over the course of the year.
The group attributed this decline in sales to the drop in fuel prices and the impact of its divestments over the previous two years.
