LONDON: The British Muslim billionaire Issa brothers and private equity group TDR Capital have agreed to buy the British supermarket chain Asda from Walmart for an enterprise value of $8.8 billion and plan to roll out more smaller stores.
The deal will enable Mohsin and Zuber Issa, who founded petrol station operator EG Group nearly two decades ago, to take Asda back under British ownership for the first time since 1999, when Walmart paid 6.7 billion pounds for the business.
The new owners want to drive growth at Britain’s third-biggest supermarket chain by expanding its presence into smaller neighborhood shops to add to its large supermarket format, bringing it more in line with competitors Tesco and Sainsbury’s which offer both.
Walmart will retain an unspecified equity investment in the business, an ongoing commercial relationship and a seat on the board, while British retail veteran Roger Burnley will remain in charge at Asda.
“After a successful period as part of Walmart we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the UK,” the brothers said.
The new owners will invest more than 1 billion pounds in the next three years in Asda to keep prices low and to protect its supply chains.
British finance minister Rishi Sunak welcomed the deal for Asda which will retain its headquarters in the northern English city of Leeds.
Britain’s highly competitive supermarket sector has been upended this year by the COVID-19 crisis which sparked a jump in sales — and costs — as shoppers stocked up on goods during lengthy lockdowns.
While Asda’s sales increased, the chain still lagged market leader Tesco, Sainsbury’s, and smaller rival Morrisons.
All of the so-called big-four supermarket chains have also faced fierce competition from German discounters Aldi and Lidl in recent years.
In response, Walmart previously sought to sell Asda to Sainsbury’s for 7.3 billion pounds but the deal was thwarted by Britain’s competition regulator last year.
The lower price announced on Friday reflects the integration benefits that a merged Asda-Sainsbury’s would have produced. ($1 = 0.7744 pounds)
Walmart sells Asda to billionaire British Muslim brothers and TDR for $8.8 bln
https://arab.news/wedd8
Walmart sells Asda to billionaire British Muslim brothers and TDR for $8.8 bln
- The new owners want to drive growth at the supermarket chain by expanding its presence into smaller neighborhood shops to add to its large supermarket format
- The new owners will invest more than 1 billion pounds in the next three years in Asda to keep prices low
Closing Bell: Saudi main market closes the week in red at 10,526
RIYADH: Saudi equities ended Thursday’s session modestly lower, with the Tadawul All Share Index slipping 14.63 points, or 0.14 percent, to close at 10,526.09.
The MSCI Tadawul 30 Index also declined 3.66 points, or 0.26 percent, to 1,389.66. In contrast, the parallel market outperformed, as Nomu jumped 237.72 points, or 1.02 percent, to close at 23,430.93.
Market breadth on the main market remained tilted to the downside, with 156 stocks ending lower against 99 gainers.
Trading activity eased further, with volumes reaching 80.46 million shares and total traded value amounting to SR1.66 billion ($442 million).
On the movers’ board, Saudi Industrial Export Co. led the gainers, rising 6.6 percent to SR2.10, followed by Consolidated Grunenfelder Saady Holding Co., which advanced 6.43 percent to SR9.60.
Raoom Trading Co. climbed 4.36 percent to SR61.05, while Astra Industrial Group gained 4.35 percent to close at SR139. Riyadh Cables Group Co. added 3.77 percent to end the session at SR135.00.
On the downside, Methanol Chemicals Co. topped the losers’ list, falling 5.96 percent to SR7.41.
Flynas Co. retreated 5.43 percent to SR61.00, while Leejam Sports Co. dropped 5 percent to close at SR100.80.
Alramz Real Estate Co. slipped 4.64 percent to SR55.50, and Almasane Alkobra Mining Co. declined 4.55 percent to SR84.00.
On the announcement front, ACWA Power said it has completed the financial close for the Ras Mohaisen First Water Desalination Co., a reverse osmosis desalination project with a capacity of up to 300,000 cubic meters per day, alongside associated potable water storage facilities totaling 600,000 cubic meters in Saudi Arabia’s Western Province.
The project was financed through a consortium of local and international banks, with total funding of SR2.07 billion and a tenor of up to 29.5 years, while ACWA Power holds an effective 45 percent equity stake.
Shares of ACWA Power ended the session at SR185.90, up SR0.2, or 0.11 percent.
Meanwhile, Consolidated Grunenfelder Saady Holding Co. announced the sign-off of a customized solutions project with Saudi Aramco Nabors Drilling Co., valued at SR166.0 million excluding VAT.
The 24-month contract covers the sale and maintenance of field camp facilities, with the financial impact expected to begin from the first quarter of 2026.
