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Birmingham Post
Birmingham Post
Business
Jon Robinson

GMB Union calls on Kemi Badenoch to intervene in Issa brothers' proposed £12bn merger of Asda and EG Group

The GMB Union has called on the government to intervene in a planned £12bn merger of Asda and EG Group.

The organisation has written to Secretary of State for Business and Trade Kemi Badenoch urging her to get the Competition and Markets Authority to investigate the proposed deal.

It added that a merger could "threaten the UK's food supply, fuel prices and 100,000 jobs".

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News of a potential merger first surfaced in January in The Times while it was reported in March that the billionaire Issa brothers were "racing" to get the deal completed in a bid to reduce the debt burden of their forecourts empire.

Blackburn-headquartered EG Group is owned by the Issa brothers and their private equity partner, TDR Capital.

The group started out as a single petrol station in Bury, Greater Manchester, and now includes brands such as Euro Garages, Cooplands and Leon.

The brothers also partnered with TDR Capital to acquire supermarket giant Asda in 2021 for £6.8bn.

If a merger is completed, it would create a group with 581 supermarkets, 700 petrol forecourts and more than 100 convenience stores.

In March, BusinessLive reported that Asda's profits dipped in 2022 due to accelerating cost inflation but sales edged higher.

Earlier than month it was revealed that profits at EG Group increased to almost $1.5bn during 2022.

Nadine Houghton, GMB national officer, said: "The potential Asda and EG Group merger is likely to saddle the company with a massive, unsustainable debt burden.

Allowing it to go ahead would be deeply irresponsible. Firstly, it risks the jobs of more than 100,000 employees.

"As one of the largest private sector employers in the UK, the future sustainability of the business is a matter of national, public interest.

"Secondly, it would place the future of the UK's food supply at risk by loading even greater, debt on to one of the UK's Big four Supermarkets.

"Finally, it will have a chilling effect on competition for fuel prices by creating a 'super retailer' of more than 700 petrol stations.

"This merger is not in the best interests of Asda as a business and certainly not in the best interests of the public and consumers.

"GMB calls on the secretary of state to ensure the CMA investigates thoroughly - and that additional investigatory and enforcement powers are given with the Competition and Markets Bill now coming to the floor of the House."

EG Group and Asda declined to comment.

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