Tycoon Issa brothers unveil £2.3bn merger between Asda & their EG Group UK forecourts
DRIVERS fear fresh rip-offs at the pumps after Asda’s billionaire Issa brothers unveiled a £2.3billion merger yesterday.
The pair reshuffled their empire by combining the supermarket chain with their EG Group UK forecourts.
It will create a retail group with £30billion of sales and serve 21million customers a week from supermarkets, convenience stores and fuel outlets.
Tycoons Mohsin and Zuber Issa — who began their EG empire with one derelict petrol station in Bury, Gtr Manchester, and are now 40th on The Sunday Times Rich List — bought Asda in a debt-fuelled £6.8billion deal in 2020.
Senior sources have said that since that deal the market has become less competitive for motorists as Asda’s fuel prices have drifted higher.
The supermarket giant had historically been a “price leader” on fuel but since the Issas’ takeover the gap between rivals has narrowed.
Earlier this month a fuel market study found evidence that retailers are pushing up petrol and diesel prices unnecessarily and weakening competition.
It also found documents that one supermarket — thought to be Asda — had increased its fuel profit forecasts.
The Competition and Markets Authority told The Sun that it would not review the £2.3billion sale of EG’s UK operations to Asda because it had already scrutinised the overlaps.
Mohsin Issa pledged that Asda will continue to be a price leader and that the combination would mean cheaper fuel prices as it expanded.
Baron Rose of Monewden, chairman of both groups, billed the deal as creating a “retail champion” and said: “It will not lead to higher prices as a result of this — that is rubbish.”
But Howard Cox of FairFuel UK said that Asda had lost its “traditional low pump pricing ethos”.
He said: “UK diesel and petrol prices are already dishonestly higher than necessary.
“I don’t believe that the CMA has the teeth to influence how Asda and EG will continue to rip off drivers.
“That’s why we desperately need PumpWatch.”
The Sun has been calling for such a watchdog to allow drivers to compare prices and keep sellers in check.
Boss to get meddle
RUNNING the UK’s third biggest supermarket should be a dream — but no one wants the big bucks job.
Asda yesterday repeated its desire to hire a chief exec — a post empty for two years since Roger Burnley stepped down in 2021.
Some recruiters fear big-hitters have been put off by the prospect of meddling by hands-on owner Mohsin Issa.
One said: “They know they wouldn’t get to be CEO.”
Interest rate hit to loans
NEARLY 400 mortgage deals have been pulled in the past week amid fears interest rates could rise beyond 5 per cent.
The sudden withdrawal of the loans by banks and building societies is a worrying repeat of last autumn’s market chaos after the mini Budget.
Figures from Moneyfacts show there are now 5,012 home loans available, 373 fewer than the 5,385 available last week.
It follows Halifax, Bank of Ireland and Kensington doing away with some of their fixed-rate mortgage deals.
Meanwhile Aldermore and Tipton And Coseley pulled their entire range of fixed loans.
Financial markets believe the Bank of England will have to raise rates to lower inflation, which is proving much trickier than first thought.
The average two and five-year fixed mortgage rates have risen to 5.38 per cent and 5.05 per cent respectively since the start of May — levels last seen during Liz Truss’s reign as PM.
‘Failure’ of duty
MICROSOFT has accused the UK’s competition watchdog of being a global “outlier” after a decision to block its £55billion merger with Call of Duty game maker Activision Blizzard.
Miscrosoft’s lawyers said there had now been “ten clearances” from other regulators including those in South Korea and the European Union.
The tech companies have said the UK’s decision shows that it is “closed for business” and are pushing for a swift appeal date.
A trillion chips
US chipmaker Nvidia has become the latest $1trillion tech company after a wave of interest in AI sent its share price soaring.
The chipmaker is now the sixth most valuable company in the world, joining Alphabet, Apple, Amazon, Microsoft and Meta.
Nvidia boss Jensen Huang has launched a super-computer to help companies speed up the development of generative AI platforms, like ChatGPT.
Mr Huang has said we’re at “the tipping point of a new computing era”.
HOLLYWOOD BOWL’s sales have risen a fifth to £110.2million, with profits up 7.7 per cent to £26.7million as people turn to bowling for affordable family entertainment.
The cost of lane hire has increased by only 20p since 2019.
Chief Uni-leaver
UNILEVER’s finance chief Graeme Pitkethly is retiring next year after more than two decades with the maker of Magnums and Marmite.
Mr Pitkethly’s tenure has been in question after his role in leading a botched £50billion bid for GSK’s consumer division.
Shareholders had called the board “tone deaf”.
Mr Pitkethly had been a contender to replace Alan Jope as chief executive but lost out to Hein Schumacher, formerly of Heinz, after shareholders signalled fresh leadership was needed.
Rose: No need for food cap
THE chairman of Asda and EG Group has railed against the Government’s plans to introduce price caps on basic groceries.
Baron Rose of Monewden called the proposal “a relatively clumsy plan”.
No10 is exploring options to tackle soaring food inflation by working with supermarkets to agree price reductions on basics such as bread and milk.
The move has been likened to price controls last seen in the 1970s.
France already has an agreement for retailers to charge the “lowest possible amount”.
But Baron Rose, who has been in retail for 50 years and was formerly CEO of Marks & Spencer, said the scheme could cause “unintended consequences”.
He said: “The markets will control themselves. Let shopkeepers do what they do well — shopkeep.”
Supermarkets have been in political crosshairs amid concerns they are using inflation to charge more than necessary.
EG debt driver
BOSSES tried to bill yesterday’s tie-up as the creation of a “consumer champion” — but experts reckon mounting debt costs are the big drivers.
Cash from the sale of the Issas’ EG business to Asda will help to repay some of their petrol empire’s £7billion of debt which needs refinancing.
Mohsin Issa said that both Asda and EG generated huge sums of cash which meant they were “comfortable” with debt.
Chairman Baron Rose said the “capital structure is appropriate”.