Asda - comment

Press speculation over the weekend referred to Asda and EG Group owners exploring the merger of the two businesses which would result in a retail giant with 580 supermarkets, 700 petrol stations and more than 100 convenience stores. The owners, TDR and the Issa brothers, potentially seeing a merger paving the way to refinance upcoming maturities (2025) on better terms. The EG debt is particularly problematic, with 70% of the gross debt pile floating.

However, this morning’s press highlights the potential competition Authority issues with a merger, with government minister highlighting that any merger would reduce competitive market forces in the forecourt/petrol market. In 2021, the EG Group had to sell 27 petrol stations in order to address concerns that the Asda acquisition (by the same shareholders) would push up prices in some areas. The CMA have not commented on the press speculation.