EG Group: Billionaire Issa brothers sell £367m Italian arm
EG Group, the empire co-founded by a major investor in supermarket giant Asda, has sold its Italian division in a deal which values it at €425m (£367m).
The Blackburn-headquartered group has agreed terms with a consortium of established Italian operators comprising PAD Multienergy S.p.A., Vega Carburanti S.p.A., Toil S.p.A., Dilella Invest S.p.A. and GIAP s.r.l.
In a statement, EG Group said the move represented “another positive step” in its “ongoing strategy to focus on its core markets and strengthen its balance sheet”.
EG Group was founded by billionaire brothers Mohsin and Zuber Issa and is now co-owned by private equity giant TDR Capital.
Russ Colaco, CEO of EG Group, said: “We remain relentlessly focused on driving forward EG group’s growth strategy.
“This important transaction is fully aligned with this strategy, as we continue to focus on our core markets with the greatest growth potential and deliver on our deleveraging programme.
“We are grateful to our colleagues in Italy for their hard work and dedication, and we wish the business continued success in the future.”
The news comes after Zuber Issa told the FT that he thought EG Group should sell its US arm instead of floating the entire group in New York.
On the deal, a statement from the consortium said: “The acquisition of EG Italia allows us to generate new and key synergies for the development of the fuel stations network with the expansion of the services offered also with a view to the energy transition.
“The EG network together with the networks of the Consortium members, all leaders in their reference territories, will enhance the know-how and skills of the EG Italia organization, heir to the culture of Esso Italiana since 2018.”
The transaction is subject to antitrust and other regulatory approvals, with completion expected by the end of 2025.
BofA Securities acted as exclusive financial advisors and A&O Shearman as legal advisors to EG Group on the transaction.
Profit almost wiped out at EG Group
In June, City PM reported that EG Group’s pre-tax profit was slashed from $1.4bn to just $10m in 2024.
EG Group said the change to its pre-tax profit was “largely driven by the material exceptional gain that the group reported following the divestment of the majority of the UK business in October 2023 and the profit from the USA sale and leaseback transaction which completed in May 2023”.
Before those exceptional items, the group made a pre-tax loss of $195m but it generated a profit of $205m from divestments.
In 2023, the group made a pre-tax loss of $125m before exceptional items which generated a profit of $1.5bn
The deal in the autumn of 2023 saw the group sell its remaining UK forecourt business and certain foodservice locations to co-founder Zuber Issa for £228m.
Following the deal, Zuber Issa stepped down from his role as co-chief executive and became a non-executive director.
At the same time, Zuber Issa sold his shares in Asda to TDR Capital, making the private equity giant its majority shareholder. Moshin remains a significant shareholder in Asda.
The results also showed that EG Group’s revenue declined from $28.3bn to $24.1m over the year.
The group said its sales had declined as a result of the fall in fuel prices and the impact of its divestments over the past two years.