Asda, the British supermarket chain, has agreed to buy the majority of EG Group’s UK and Ireland operations for £2.27bn, including debt.

EG Group is a forecourt and convenience retailer that owns more than 350 petrol stations and over 1,000 food-to-go outlets in the two markets. It also operates in the US, Australia and several European countries.

The deal will create a combined business with annual revenues of nearly £30bn and will allow Asda to expand its presence in the fuel and convenience sectors.

Asda plans to invest more than £150m over the next three years to integrate the businesses and expects to generate synergies of £100m by increasing volumes and cross-selling opportunities.

The transaction will also strengthen EG Group’s balance sheet, as it will use the proceeds and the cash from a recent sale of US assets to repay debt.

Asda and EG Group are both owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital, who bought Asda from Walmart last year.

Zuber Issa, co-founder and co-CEO of EG Group, said: “Following this sale, EG Group will benefit from a significantly strengthened balance sheet, supporting the continued roll-out of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience.”

He added: “I am confident the UK&I business will go from strength to strength under Asda’s ownership.”

The deal is subject to regulatory approval and is expected to close in the first half of 2024.

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