A key co-owner of Asda has sold his stake to a private equity company, making it the majority owner.
Zuber Issa, the co-chief executive, sold his 22.5% share in Asda to private equity backer TDR Capital.
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Now TDR is the majority owner, controlling 67.5% of the supermarket group.
The deal is set to be completed in the third quarter of this year, the company said.
Ownership scrutiny
Private equity firms acquire businesses, invest to improve financial performance and seek to sell them on for a profit.
Such firms have come in for criticism for their focus on profit as employees suffer if a business fails. Asda said it used a “dismiss and reengage” practice – when an employee is told they will be let go unless they agree to potentially weaker contract terms – only a last resort.
The ownership has been subject to political scrutiny in recent years.
MPs on the Business and Trade Select Committee raised the issue in July and December hearings last year.
The other remaining owners of Asda are Walmart – the old owners, who held on to 10% – and Mohsin Issa, Zuber’s brother. His stake is 22.5%.
The company’s labyrinthine corporate structure was the subject of MP questions in December as there are 16 different entities between the owners and the supermarket operating company, many of them registered offshore.
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Who are the Issas?
Billionaires Zuber and Mohsin Issa bought Asda from Walmart for £6.8bn in 2020 in a deal with the backing of TDR capital.
The brothers own petrol forecourt and filling station company EG Group, also with TDR.
Zuber will also step down as co-CEO of the group, and Mohsin will become sole CEO.
“With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours,” Zuber said.
“I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions.”