The British billionaire Issa brothers and private equity group TDR Capital have agreed to buy the British supermarket chain Asda from Walmart for $8.8 billion to take on rivals such as Tesco with new smaller stores.
The deal, led by Mohsin and Zuber Issa who founded the petrol station operator EG Group nearly two decades ago, and TDR means Asda will be back under British ownership for the first time since 1999, when Walmart paid 6.7 billion pounds for the business.
The new owners said that they would look to drive growth at Asda by expanding its presence into smaller neighborhood shops from its primarily large supermarket format, bringing it more in line with larger competitors Tesco and Sainsbury's which offer both.
The two brothers said they planned to take their experience with EG Group, which included a convenience business and brand partnerships, to help grow Asda.
"After a successful period as part of Walmart we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the UK," they said.
Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board. Chief Executive Roger Burnley will continue to lead the company.
The new owners will invest more than 1 billion pounds in the next three years in Asda to keep prices low and to protect its supply chains, it said.
While Asda's sales have increased during the COVID-19 pandemic, the chain has still lagged Sainsbury's, Morrisons and market leader Tesco.