Asda supermarket to stay in Leeds after Lancashire billionare brothers' buyout
The brothers behind petrol forecourt firm EG Group won the £6.8 billion deal alongside private equity firm TDR Capital.
Speaking to The Yorkshire Post today after the announcement, Asda chief executive Roger Burnley said: “I still definitely want to beat them at cricket but other than that I’m delighted to be partnering with Mohsin and Zuber form the other side of the Pennines for sure.”
Walmart will retain a minority stake in Asda as part of the agreement and the new owners have committed to keeping the retailer’s headquarters in Leeds ,and said they will invest to grow its convenience and online operations. Mr Burnley will stay on as chief executive, leading a board which will have representatives appointed by the Issa brothers, TDR Capital and Walmart.
He added: “It’s been greeted with real enthusiasm, and rightly so, across our business. Our colleagues have been fantastic this year, above all years, in the part they’ve played and I’m really pleased that through what has been a pretty public process, that we’re finally able to talk to them today with a great outcome for our future.”
More than £1 billion will be invested into the supermarket chain over the next three years the new owners said. The Issas said: “We are very proud to be investing in Asda, an iconic British business that we have admired for many years.”
Last week, a third bid from Lone Star Funds, fronted by former Asda executive Paul Mason, was dropped after failing to meet the price of its rivals.
Walmart sought a sale after the UK’s competition regulator blocked its merger with Sainsbury’s amid fears the move would push up prices and reduce product quality.
The US grocery started new discussions over a sale of Asda in February, and they restarted in July, 21 years after Walmart first purchased the Leeds-based retailer.
It comes after the supermarket’s workers had to sign new contracts brought in last year that union GMB said have “severely damaged many people’s quality of life”.
Roger Jenkins, GMB National Officer, yesterday said: “The new owners must offer sound reassurances to more than 100,000 thousand Asda workers.
“They have had enough uncertainty and need to know that their futures are safe and secure. The new owners must recognise that Asda is a profitable well-run company, thanks to our members’ commitment and hard work - particularly through the Covid pandemic.”
Responding, Mr Burnley said: “A strong, growing Asda is good for all our stakeholders - suppliers, customers and not least colleagues - so no responsible business leader would try and predict what’s going to happen well into the future in terms of changes and innovation.
“The retail industry has gone through change, but who’d have thought we’d be taking on 23,000 temporary colleagues this year as part of Covid, with many of them still with us.”