Asda, Britain's third biggest supermarket group, said it has completed the acquisition of the majority of EG Group’s UK & Ireland business for an enterprise value of £2.07 billion (€2.4 billion).
The deal, creating a group with combined revenue of nearly £28 billion (€32.1 billion), was announced in May, when the value was put at £2.27 billion (€2.6 billion). The revised price reflects adjustments agreed between the two parties.
Asda's strategy is to boost its convenience store presence by rolling out Asda Express stores across EG's 356 UK sites, part of a long-term plan to overtake Sainsbury's and become the country's second largest supermarket group.
Asda, which is chaired by Stuart Rose, the former boss of Marks & Spencer, said the recruitment process for a permanent chief executive was ongoing.
Monthly industry data has consistently shown market leader Tesco, Sainsbury's, discounters Aldi and Lidl, and Marks & Spencer performing robustly, with the privately owned and highly leveraged Asda and Morrisons trailing.
EG Group said proceeds from the deal will be used to repay debt, reducing net leverage and enabling $3.2 billion of loans to be extended to February 2028. It plans to focus on international growth.
Gary Lindsay, managing partner at TDR Capital LLP, commented, "This transaction is all about growth – and bringing together the complementary strengths of Asda and EG UK. We are creating an enhanced and more diverse Asda business that delivers even greater value for its customers on a daily basis in stores and online.
"Becoming the number two UK supermarket again and delivering a stronger and more compelling proposition for UK consumers are the metrics we will judge the success of this transaction by."
News by Reuters, additional reporting by ESM.