The £6.7bn takeover of Asda looks set to receive final approval after the Issa brothers and TDR Capital offered to sell 27 petrol stations to appease the Competition and Markets Authority (CMA), which raised concerns last month that the acquisition could push up fuel prices.
The supermarket group’s new owners also control the EG Group, which operates 395 petrol stations in the UK, while Asda has 323 forecourts. With many of the petrol stations located in the same parts of the UK, the CMA’s phase 1 investigation raised local competition concerns in relation to the supply of road fuel in 36 areas across the UK and the supply of a specific type of fuel – called auto-LPG – in a further area.
The Issa brothers and TDR Capital had already announced plans to sell Asda’s forecourt business to EG for £750m.
The CMA will now have up to 40 days to analyse the proposals, with an initial statement today suggesting it was likely to accept them, avoiding a more in-depth phase 2 investigation of the Asda deal.
It said: “The CMA considers there are reasonable grounds for believing the undertakings offered jointly by Mr Zuber Issa, Mr Mohsin Issa and TDR Capital LLP, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002.”
A spokesperson for the Issa Brothers and TDR Capital said: “Over the course of the past 10 days, we have been working constructively with the CMA to offer remedies to address the CMA’s competition concerns.
“Today, we are pleased to confirm that the CMA has indicated it has reasonable grounds to believe the proposed remedies are acceptable, enabling us to arrive at a conclusive outcome for the acquisition of Asda in Phase 1.”
Asda has been operating independently from its buyers whilst the CMA conducts its investigation.
NAM Implications:
- Obviously, no alternative if the new owners want CMA approval.
- Key focus will be on managing debt.
- A matter of joint interest to the owners and suppliers!
