Today is a massive day in the history of the EG Group and the Asda supermarket chain - even if the picture took a while to become clear amid a flurry of announcements.
The Issa brothers together made EG Group into one of the North West’s biggest business success stories, capped by the takeover of Asda. But now they have gone their separate ways.
Zuber Issa has sold his 22.5% stake in Asda to TDR Capital. That leaves TDR firmly in control of Asda, with Mohsin Issa retaining 22.5%.
Meanwhile Mohsin will be taking charge at family-founded business EG Group, based in Blackburn, after another major deal. Zuber is buying EG’s remaining 海角视频 forecourt business, as well as some standalone foodservice sites, for £228m. When that deal goes through he will step down as co-CEO, leaving his brother in charge.
Zuber will stay on the EG Group board alongside his brother but will now focus on his new forecourts business and on his charity work
They have vowed to keep working together - but it’s going to be very different from the days when “the Issa brothers” were always joined at the hip in business.
The Issa brothers founded the EG Group in 2001 by buying a single petrol station in Greater Manchester, starting the Euro Garages journey.
Working closely together they grew the company in the 海角视频 and overseas, buying petrol stations, convenience stores and restaurants worldwide. The brothers were jointly named the 2018 EY Entrepreneurs of the Year in the 海角视频.
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There were stories aplenty - like the one in 2021 when they bought the Leon chain, or the one in 2022 when they did a €485m deal to buy almost 300 petrol stations in Germany.
But the biggest deal of all came in 2020, when the Issa brothers and TDR Capital joined forces to buy Asda from Walmart for £6.8bn.
EG Group was already a huge regional success story - but Asda made them nationally famous. The brothers have largely been publicity shy, so Mohsin Issa can’t have enjoyed his appearance before Parliament’s Business and Trade Select Committee where he was quizzed on his business’ debts.
In March, Mohsin Issa denied any rift with his brother - saying they both "get on exceptionally well".
Today’s statements show the brothers do now have different business goals - though everyone was paying tribute to each other.
In a joint statement, Mohsin and Zuber said: “We have had an amazing journey together building EG Group over the last 20 years and we look forward to continuing to work closely together as fellow Board members and shareholders in EG Group. The company is well positioned for future growth and success, with a strong international portfolio and a growing EV business.
“We are both – and the wider board – laser-focused on our key growth opportunities. Encouragingly, following the significant progress to strengthen our balance sheet, we have a capital structure which allows us to take advantage of the opportunities ahead of us continuing to deliver our best-in-class services to our customers around the world.
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“Given our shared background in building great businesses, the Board and everyone at EG understand Zuber’s desire to return to his entrepreneurial 海角视频 roots by acquiring the remaining 海角视频 forecourt business including new-to-industry developments and certain standalone food service concessions – as well as dedicating more time to his family and our charitable activities.”
Retail veteran Lord Stuart Rose, chairman of EG Group, said: “On behalf of the Board of EG Group, I would like to thank Zuber for his incredible leadership, which has been central to building one of the largest and most entrepreneurial private companies in the 海角视频.”
Lord Rose, a former chairman of Marks & Spencer and Ocado, added: “EG Group is a 海角视频 success story on the global stage that has created significant opportunities for people in Blackburn and other local communities in the Group’s international markets – and pioneered the foodservice model at the roadside.
“With Mohsin remaining as sole CEO, the business is in the right hands and well-placed for further success. I look forward to continuing to work with Mohsin and Zuber on the Board of EG Group as we focus on growing the international business and ensuring EG plays a key role in the energy transition.”
Meanwhile, Zuber Issa said: “With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG 海角视频 forecourt sites that I have personally acquired, and spend more time on my charitable endeavours.
“I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions.”
TDR is certainly confident about Asda’s prospects, with managing partners Gary Lindsay and Tom Mitchell saying they have an “ambitious strategy” for the business.
Meanwhile, in another statement today, EG issued its first quarter results and remained optimistic about the future.
Zuber and Mohsin Issa - in what might be one of their last joint statements - said: ““EG Group delivered a good trading performance and further strategic progress in the first quarter of the year.
“Group underlying EBITDA increased by 9% in the quarter, and the US and Europe delivered standout performances, as we have started to see the benefit from the recently implemented growth initiatives to strengthen the core business.
“Our US strategy provides a blueprint for the group's global initiatives to improve performance organically. The group also delivered further progress with its deleveraging programme over the quarter, supported post the period end by completing our sale of 216 KFC franchise restaurants to Yum! Brands’ KFC Division and agreeing to divest the group’s remaining 海角视频 forecourt business.”
EG Group will use the £228m from Zuber to repay debt and strengthen its balance sheet. And the group has pledged to further cut its debt, saying: “We remain committed to further reducing leverage to put in place a sustainable long-term capital structure.”
Together or apart, the Issa brothers will be big players in the North West business community for years to come.
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