Britain’s third-largest supermarket chain Asda has returned to private ownership, but who are the billionaire brothers behind the £6.8bn deal? Retail Week takes a closer look at Mohsin and Zuber Issa.
They are the self-made brothers from Blackburn who have built a multibillion-pound empire from humble beginnings.
Mohsin and Zuber Issa took their first steps into retail as shopfloor workers in their dad’s petrol station and leased their first site together back in 1999 – the same year Walmart shelled out £6.7bn to buy Asda.
Twenty-one years later, the ambitious lads from Lancashire have won the race to take Asda back into British hands, after striking a landmark deal with the world’s largest bricks-and-mortar retailer.
It is an amazing and inspiring story – and one the Issa brothers hope has many chapters left.
“This isn’t just a financial investment for us,” says Mohsin, co-founder and joint chief executive of the Euro Garages empire he and his brother have led so successfully over the past two decades.
“We feel that Asda’s customer-centric philosophy, its focus on operational excellence and commitment to the communities in which it operates, is closely aligned to the values we have built at EG Group.”
Global players
It was in 2001 that the group was formed, when the Issa brothers, who moved to Blackburn with their Indian parents in the 1960s, purchased their first petrol station.
The derelict site in Bury cost £150,000 and is around 15 miles from the town they still call home – Mohsin and Zuber are said to be building five mansions in Blackburn for them and their closest relatives.
That is a far cry from the small terraced house the brothers were brought up in and sums up the stratospheric growth trajectory their business has been on over the past decade.
Early expansion was achieved at a much slower pace, however. It took the Issas until 2012 to build their portfolio to 76 sites across the UK, but then the group shifted its growth plans into another gear.
“Asda’s customer-centric philosophy, its focus on operational excellence and commitment to the communities in which it operates, is closely aligned to the values we have built at EG Group”
Mohsin Issa
With Mohsin running the business day-to-day, Zuber, who leads on strategy and acquisitions, struck a series of deals with ExxonMobil and Shell to establish EG as a serious player in the petrol forecourt game. By the end of 2015, its 370-strong estate gave it a nationwide footprint.
The following year, the Issas set their sights on international expansion after securing investment from TDR Capital – the private equity firm the brothers have joined forces with again to secure Asda.
It merged with European Forecourt Retail, taking its petrol station estate to more than 1,100 locations. Further acquisitions in Germany, Italy and the Netherlands followed, before it crossed the pond to the US in 2018, snapping up stores from Kroger.
Last year, it took its first steps Down Under, after buying more than 500 stores from Woolworths in Australia.
EG now operates more than 6,000 petrol stations, employs 44,000 people across three continents and works with a who’s who of food and beverage operators including Subway, Greggs, Starbucks, Burger King and KFC at its larger sites.
Community focus
The group is no stranger to more ‘traditional’ grocery retail, either. Sainsbury’s previously operated nine c-stores on EG petrol forecourts – they closed in 2018 – and just last month Asda lifted the lid on plans for it to open three Asda On The Move convenience shops at EG sites in the Midlands.
Asda insisted at the time the partnership was not an indication that EG was in the driver’s seat to buy the grocer, but now that it has, more of those c-store formats are almost certain to follow.
If they do, the move could provide Asda with a huge growth engine: non-fuel retail revenues now outstrip sales of petrol and diesel at the EG Group’s larger forecourt formats.
But building their business is far from the Issas’ only focus – community and charity work has always been at the heart of EG Group.
Mohsin and Zuber have founded the EG Foundation and the Issa Foundation – the latter supports communities and organisations with activities that promote education and health, and tackle poverty.
During the coronavirus crisis, they have supported food banks, provided food and drink for emergency services staff and donated cash to the NHS.
The Issas have also funded several projects in their hometown, where the EG Group is headquartered, including the purchase of an MRI scanner at Blackburn Royal Hospital and creating the Blackburn Youth Zone. They also set up local football team Euro Garages FC.
Such strong community values are likely to be reflected in the way the brothers run the Asda business.
£1bn war chest
Although they have not given away much at this early stage about their plans for the supermarket giant, the Issas have pledged to “maintain its commitment” to Asda’s existing Create Change for Better programme – an initiative that helps people living in poverty in the UK.
The Issas have also vowed to “maintain competitive pay levels” for Asda staff and offer them “exciting and enriching” job opportunities.
Chief executive Roger Burnley will remain at the helm and will be backed by a £1bn war chest over the next three years, as EG and TDR set down an early marker to Asda’s supermarket rivals with a vow to lower prices and strengthen its supply chain.
“We believe our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy,” the Issa brothers say. Only a brave person would bet against them.
After years in the doldrums as an underinvested division of Walmart’s sprawling retail empire, Asda could now be given the ammunition it needs to fire on all cylinders again.
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