The billionaire brothers who own Asda are exploring a potential £13bn merger with their petrol forecourt empire.
Mohsin and Zuber Issa acquired the supermarket giant in 2021 for £6.8bn alongside private equity form TDR Capital.
According to a report in The Sunday Times, merger talks are being held ahead of refinancing at Blackburn-headquartered EG Group, which has £7bn of debt due in 2025.
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It has been reported that the brothers and TDR Capital hope that by combining both profitable businesses they will be able to refinance the debt on far more favourable terms.
When contacted by BusinessLive, a spokesman said the group would not be commenting on the news, but did not deny the report.
The news comes after it was revealed that the Issa brothers are also considering a £1bn sale of part of their US petrol station empire.
First reported by Sky News, EG Group has hired investment bankers at Eastdil to lead the process.
EG Group is jointly owned by the Issa brothers and TDR Capital, the private equity firm they partnered with to acquire Asda in 2021.
The group, whose brands include Euro Garages, Coopland and Leon, has over 6,600 sites across the world.
Mohsin and Zuber Issa started out with a single petrol station in Bury, Greater Manchester, in 2001.
According to the latest Sunday Times Rich List, they are worth a combined £4.73bn.
In response to the proposed merger, GMB national officer Nadine Houghton said: "This proposed merger raises the spectre of a private equity black hole on the UK high street.
"More and more of our essential household goods – from food to fuel – are controlled by unaccountable private equity backers.
"This merger isn’t in the interests of the 200,000 impacted workers, or the UK economy, or even consumes.
"It simply suits the debt refinancing arrangements of a private equity firm and their business partners.
"GMB stands on the side of hard-working families in calling for the role of the CMA to be expanded - giving greater regulatory oversight in relation to private equity buyouts and ensuring greater protection of both consumers and workers."
In its most recent trading update, for the three months to September 30, 2022, EG Group's total revenue increased to £8bn from the $7.1bn it reported during the same period in 2021.
The group's EBITDA also increased from $428m to $437m, with fuel gross profits rising from $511m to $594m and foodservice gross profit going from $171m to $179m.
Grocery and merchandise gross profit dipped from $370m to £365m over the same period.
As of September 2022, EG Group's net debt stood at £9bn.
The group employs more than 50,000 people working in over 6,600 sites across the UK and Ireland, Europe, USA and Australia.
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