Competition probe into Asda takeover by Lancashire's Issa brothers

Asda’s planned £6.8 billion takeover by the billionaire Issa brothers and private equity firm TDR Capital is being investigated by the UK’s competition watchdog.

Tuesday, 8th December 2020, 3:08 pm
Updated Tuesday, 8th December 2020, 3:12 pm
The Issa brothers had their bid for Asda accepted

The Competition and Markets Authority (CMA) said it has formally launched its so-called phase one probe into the Asda deal after the European Commission referred the deal to the UK.

It will now look at whether the acquisition by Mohsin and Zuber Issa – the Lancashire brothers behind petrol forecourt firm EG Group, who have partnered with TDR – will lead to a “substantial lessening of competition” in the UK.

The CMA said the brothers and TDR – which have formed a takeover vehicle called Bellis Acquisition Company for the deal – requested the EC referred the deal to the CMA for review.

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The CMA now has until February 18 to reach a decision on the first stage of its investigation.

It has set a deadline of December 22 for interested parties to comment.

The Blackburn-based Issa brothers and TDR won the lengthy bid battle for Asda in October.

The deal is not expected to encounter the same competition woes as the previous ill-fated attempt by Sainsbury’s to buy out Asda, which was blocked by the CMA last year.

But it is thought the CMA may demand the Issa brothers offload some of their EG sites, having cited reduced competition in fuel retailing among its concerns when it vetoed the Sainsbury’s tie-up.

A spokesman for the Issa brothers and TDR Capital said they had expected the CMA to investigate the deal.

“We are looking forward to working constructively with the CMA to address any questions they may have,” he added.

As part of the deal, the buyers have committed to keeping Asda’s headquarters in Leeds and said they will invest to grow its convenience and online operations.

The chain’s current US owner, Walmart, will also retain a minority stake in Asda.