Walmart is selling Asda, the company’s wholly owned U.K. business, for an enterprise value of £6.8 billion, on a debt-free and cash-free basis. The company is selling the chain to the Issa brothers, founders and co-CEOs of EG Group, a global convenience retailer, and investment funds managed by TDR Capital, a private equity firm.
Under the new ownership structure, the Issa brothers and TDR Capital are acquiring a majority ownership stake in Asda. Walmart said it will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.
With support from its new ownership, Asda will continue to invest in accelerating its omnichannel offer and in the resilience of its supply chain, including maintaining its commitment to supporting domestic suppliers and small businesses. Asda will remain headquartered in Leeds, and it 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.
Judith McKenna, president and CEO of Walmart International, said, “We are delighted to be able to announce this deal today, which we believe creates the right ownership structure for Asda, building on its 71 year-heritage, whilst bringing a new entrepreneurial flair, not only to Asda, but also to U.K. retailing. I’m delighted that Walmart will retain a significant financial stake, a board seat, and will continue as a strategic partner. Asda has been a powerhouse of innovation for the rest of the Walmart world, and we look forward to continuing to learn from them in the future. This important combination will continue to keep customers and colleagues at Asda’s heart, which is important to us all.”
Roger Burnley, CEO of Asda, said, “This new ownership opens an exciting new chapter in Asda’s long heritage of delivering great value for U.K. shoppers. With our combined investment, expertise and ambition, Asda, Walmart, the Issa brothers and TDR have an incredible opportunity to accelerate our existing strategy and develop an even more exciting offer for our customers as well as strengthen our business for our colleagues. In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth.”
Asda has a multi-format, omnichannel offering, selling its products through a network of 584 grocery stores, 18 standalone gas filling stations and 33 Asda Living stores and also online. The transaction is subject to regulatory approvals and is expected to be completed in the first half of 2021.