New Delhi, Oct 3 (IANS): Retail giant Walmart Inc. will sell its UK unit Asda to Indian-origin billionaire Issa brothers -- Mohsin and Zuber Issa -- along with investors TDR Capital for an enterprise value of around $8.8 billion.
Mohsin and Zuber are founders and co-CEOs of EG Group, a global convenience and forecourts retailer, headquartered in Blackburn, UK. Their parents had moved to the UK from Gujarat in the 1970s.
Under the new ownership structure, the Issa brothers and TDR Capital are acquiring a majority ownership stake in Asda said a joint statement, adding that Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the Board.
"Walmart Inc., Asda Group Limited, the Issa brothers and TDR Capital announced thata-the Issa brothers, founders and co-CEOs of EG Group, a global convenience and forecourts retailer, headquartered in Blackburn, UK, and investment funds managed by TDR Capital LLP, a leading UK-based private equity firm, have together agreed to acquire Asda, Walmart's wholly-owned UK business, for an enterprise value of 6.8 billion pound (around $8.8 billion), on a debt-free and cash-free basis," it said.
The statement said that Asda will remain headquartered in Leeds, where it built its heritage and roots, and will continue to be a significant contributor to the UKa-economy and tax base. The business will continue to be led by Roger Burnley who will form part of Asda's Board alongside representatives appointed by the Issa brothers, TDR Capital and Walmart.
"At a time of evolution in the UK food retail sector, the new owners will continue to build a strong and successful business, benefiting from fresh capital and expertise, as well as valuable links with the world's largest retailer," it said.
The Issa brothers, backed by TDR Capital, will support and accelerate Asda's existing strategy, which is anchored in delivering low prices and convenience to customers however they want to shop, it added. Under the new ownership, ASDA will continue to work closely with suppliers to provide best value ranges for customers in the categories that matter most to them.
Along with accelerating ASDA's existing strategy, the Issa brothers will bring significant additional expertise, particularly in convenience retail and brand partnerships, drawing on their experience of building a global convenience retailer with more than 6,000 sites.
They are well placed to support Asda in developing a compelling convenience retail proposition and taking it to market, and to advise on the development of strategic brand partnerships that will better enable Asda to address multiple consumer missions, said the statement.
"Through these and other initiatives, the Asda leadership team and the company's new ownership will be focused on building a differentiated operating model that will drive competitive outperformance and long-term growth," it said.