Asda buys petrol station group EG for £2.3bn

Asda has agreed to buy petrol station giant EG Group for £2.27bn in a move which will see the UK's third-largest supermarket expand its move into the convenience food sector.

The deal will bring together two businesses that are both already owned by the billionaire Issa brothers.

EG Group runs about 350 petrol filling stations, and also has more than 1,000 food-to-go locations.

The tie-up will create a company with revenues of nearly £30bn.

Asda chairman Stuart Rose said: "This transaction is all about driving growth by bringing Asda's heritage in value to even more communities and accelerating the growth of its convenience retail business."

Asda already runs 166 "On the Move" convenience stores, which have been rolled out on EG sites since the Issa brothers bought the supermarket in 2021.

The combined company will employ 166,000 employees across the UK, but retail analyst Richard Hyman predicted jobs cuts at a senior level would follow.

"It was inevitable the Issa brothers would want to consolidate assets they already own," Mr Hyman said. "They're financially aggressive owners and operators, the only reason they'll be doing this is to cut costs."

Asda co-owner Mohsin Issa said the combination of Asda and EG would be "positive news for motorists, as we will be able to bring Asda's highly competitive fuel offer to even more customers".

The Competition and Markets Authority (CMA) is currently investigating all supermarkets over high food and fuel prices.

The competition watchdog is looking at whether a "failure in competition" means customers are overpaying, despite claims by supermarkets that they are working to keep food prices "as low as possible".

A separate investigation into the fuel market has found some supermarkets have increased margins on petrol and diesel.

The tie-up between Asda and EG has been expected for some time, and ahead of the deal being announced the GMB union called for it to receive "proper scrutiny" by the CMA.

GMB national officer Nadine Houghton said the union was concerned that rising interest rates would saddle Asda with "unsustainable" levels of debt.