EG Group to sell off 27 forecourts
EG Group is prepared to sell 27 forecourt sites to secure the deal to buy Asda without a full inquiry by the CMA (Competition and Markets Authority).
The CMA has said that the deal raises local competition concerns in relation to the supply of road fuel in 36 areas across the UK. It also warned that unless these concerns were addressed, it would need to carry out an in-depth phase two inquiry.
The decision was released on April 20 and gave the purchasers – Zuber Issa, Mohsin Issa and TDR Capital – ten working days to agree a remedy with the CMA.
EG Group operates 395 petrol stations in the UK. Asda owns 323. The CMA announced “Mr Zuber Issa, Mr Mohsin Issa and TDR Capital LLP jointly offered undertakings to the CMA, which involve divesting 27 EG Group Limited petrol filling stations. The CMA considers that there are reasonable grounds for believing that the undertakings offered jointly by Mr Zuber Issa, Mr Mohsin Issa and TDR Capital LLP, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002.”
Mohsin and Zuber Issa and TDR Capital jointly offered undertakings to the CMA, which involve divesting 27 EG Group petrol filling stations.
The news comes after the CMA warned last month that the Issa brothers’ £6.8 billion takeover of Asda could lead to higher petrol prices in some areas.
Following the CMA’s announcement, the Issa Brothers and TDR Capital released a statement saying: “Over the course of the past 10 days, we have been working constructively with the CMA to offer remedies to address the CMA’s competition concerns. Today, we are pleased to confirm that the CMA has indicated it has reasonable grounds to believe the proposed remedies are acceptable, enabling us to arrive at a conclusive outcome for the acquisition of Asda in Phase 1.
“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.”