Billionaire Issa brothers end Asda partnership as union attacks private equity owners
Zuber Issa promises to ‘spend more time on my charitable endeavours’
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Your support makes all the difference.Zuber Issa has ended his partnership in Asda with brother Mohsin, selling his stake in a deal that gives private equity firm TDR Capital full control of the supermarket chain.
The move brings TDR Capital’s share to 67.5 per cent, while 22.5 per cent is still owned by Mohsin. The supermarket is currently hunting for a new chief executive to help stem falling market share.
The billionaire brothers from Blackburn bought Asda from Walmart in 2020 for £6.8bn with the backing of TDR Capital. Walmart still holds a 10 per cent stake.
But there have been reports of a rift in their relationship.
Zuber Issa said he would now “spend more time on my charitable endeavours” and has bought the UK petrol forecourt business from the brothers’ EG Group. That deal means he will also step down as co-chief executive of EG Group, so Mohsin will become sole chief executive.
However, the GMB union said the deal would spell bad news for shoppers and staff, accusing TDR Capital of “asset-stripping” at the supermarket.
The union has previously claimed the owners slashed an estimated 8 million staff hours from the shop floor in the business to boost profits. Asda denied the claims at the time, pointing to investment in stores and the launch of the supermarket’s loyalty app, Asda Rewards, as evidence that the company is growing.
Nadine Houghton, GMB national officer, said: “TDR Capital have serious questions to answer about their asset-stripping of Asda.
“Their private equity ownership has already been bad for consumers – with Asda now the most expensive retailer for fuel – and bad for staff, with millions of working hours cut from the shop floor.
“Further involvement from TDR can only spell more bad news. Bosses must change course to protect Asda workers and stop this British retailer further losing more market share.”
Zuber Issa said: “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.
“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.”
Gary Lindsay and Tom Mitchell, managing partners of TDR Capital, said: “We first invested into Asda over three years ago, seeing a huge opportunity to cement its position as one of the UK’s leading retail brands.”
“As majority owners, we will continue to work closely with the Asda management team and colleagues across the business to support the ambitious strategy, which we believe is the right one to continue to move Asda forward.”
Meanwhile, Asda continues its hunt for a chief executive after Mohsin Issa handed over the running of the supermarket as part of a revamp of the chain.
Bosses must change course to protect Asda workers and stop this British retailer further losing more market share
Mohsin said earlier this year that he was carrying out a “reset” of the company before hiring a new chief.
In April, Asda revealed its underlying earnings swelled by a quarter last year with growth in food and clothing sales.
Asda was named Britain’s most expensive supermarket fuel retailer earlier this week, according to RAC analysis. An Asda spokesperson said the supermarket disputes the RAC findings.