Walmart once tried – and failed – to merge Asda, its UK operation, with Sainsbury’s. Now it has agreed to sell the supermarket chain to “two billionaire brothers from Blackburn”, Moshin and Zuber Issa, and the private-equity firm TDR Capital, says Zoe Wood in The Guardian.
The deal, which will see Walmart retain a minority stake in the company, as well as a seat on the board, values Asda at around £6.8bn, only “slightly more” than the £6.7bn that Walmart paid in 1999. This reflects the fact that, even with Walmart’s “financial power”, Asda has “struggled” in the “ferociously competitive” grocery market.
The “self-made” Issas are touted by Walmart as the “secret sauce” of the deal, says Deirdre Hipwell on Bloomberg. This is because Walmart hopes that the brothers can use their ownership of EG Group, which operates food outlets and stores on over 6,000 different sites, including petrol stations and highway service areas, to help Asda break into the “lucrative convenience-store market”. However, Britain’s convenience-store arena is “crowded with competitors”, with many of the best sites already “snapped up”, while there is also evidence that the rapid growth “may be poised to cool”. Covid-19 has also moved a lot of food shopping online.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The government has welcomed Asda returning to British ownership, says Christopher Williams in The Sunday Telegraph. But the cost of the deal is fuelled by £4bn of junk bonds and leveraged loans, so the Exchequer will be “out of pocket for some time”. The cost of the borrowing will be offset against Asda’s profits.
-
Landlords ordered to make rental properties more energy efficient by 2030The government has said rental properties must have a minimum EPC rating of C by 2030. We explain how much it will cost landlords to upgrade their buy-to-let portfolio
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?
Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Trump's tariffs and a shrinking market for alcohol deal double blow to DiageoDonald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
-
Three stocks in recruitment companies with promising recovery playsRecruitment agency Robert Walters and its peers are struggling, but now's the time to buy, says Rupert Hargreaves
-
Four UK data companies to buy nowCompanies that create, harness or turn data into a valuable offering could be sitting on a hugely profitable gold mine. Rupert Hargreaves picks four of the best UK data companies to buy now.
-
What’s the outlook for the shipping industry in 2025?All we know for certain about the year ahead is that it will be volatile. But the container shipping sector thrives on choppy waters
-
What investors can expect from stocks and the economy in 2025There are reasons for investors to be hopeful about 2025, with slowing interest rates and moderating oil prices. But trouble may be brewing in bond markets
-
Why Wise could be worth a lot more than its share price impliesForeign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
-
Can The Gym Group pump up your portfolio?Gym Group was one of the best UK small-cap stocks in 2024 and will beef up your profits this New Year
