Issa brothers set to sell petrol stations to help secure Asda takeover approval

The billionaire brothers buying Asda have proposed selling 27 of their current petrol station sites in a bid to get the £6.8 billion takeover over the line.

Last month, the UK competition watchdog raised concerns that the deal could lead to higher petrol prices for motorists in 36 locations.

On Wednesday, the Competition and Markets Authority (CMA) said the Issa brothers behind forecourt giant EG Group and private equity backer TDR Capital had proposed the divestment of 27 stations.

The regulator said there were “reasonable grounds for believing that the undertakings … or a modified version might be accepted by the CMA”.

Zuber and Mohsin Issa and TDR have spoken with the regulator over the past 10 days to find a potential remedy for the local competition concerns.

The brothers said they were “pleased” that the CMA had said it may accept its offer and was confident of finding new owners for the sites earmarked for sale.

In a joint statement, the Issa brothers and TDR said: “As is usual in cases such as these, the CMA now has a period of 40 days to work through the detail of the proposed divestitures and therefore we are restricted in the level of information we are able to provide on specific sites.

“However, we have been comforted by the significant interest we have already received from potential buyers during this process, demonstrating the strong growth potential of our forecourts and the liquidity in the market.

“Over the coming months, we are confident that we will be able to agree a sale to suitable operators to take over all identified sites and we will share more information in due course.”

EG Group, the forecourt giant owned by the brothers, operates 395 petrol stations, while Asda owns 323 sites.

In October, EG Group and private equity backers TDR Capital agreed a deal to take control of the UK supermarket chain from US retail giant Walmart.

Two months later, the CMA formally launched an initial phase one investigation into the deal to consider whether the tie-up would result in a “substantial lessening of competition”.

It said it could have to launch a phase two investigation if it did not agree a solution regarding competition concerns, but the brothers hope the latest update will allow for the Asda acquisition to now be formally approved.