WARRINGTON North MP Charlotte Nichols is urging the Government to intervene and get the competitions regulator to fully investigate a proposed acquisition by supermarket giant ASDA of EG Group’s UK and Ireland business.
Ms Nichols says the debt-laden acquisition by Asda of EG Group’s UK and Ireland petrol forecourt business is not in the best interests of the country and has written to Kemi Badenoch, Secretary of State for Business and Trade, urging her to make sure the Competition and Markets Authority (CMA) intervenes.
Charlotte has raised concerns that the merger could lead to reduced competition within the fuel market and points out that the CMA have already raised concerns about the role of retailers in raising fuel prices.
This follows ASDA workers trade union, GMB union, writing to the Secretary of State on this matter in April.
Ms Nichols said:“As one of the largest private sector employers in the UK, the future sustainability of ASDA is important to my constituents who currently work there. Their livelihoods rely on it.
“Not only that but many of my constituents do a weekly shop at the store.
“As well as this, there are serious concerns about the impact of what this means for fuel prices with one company having a potential monopoly on access to our petrol pumps.
“This merger is not in the best interests of the country, my constituents or local business. As Secretary of State, I write to ask that you ensure the CMA steps in and investigates.”
THE GMB Union has warned that the debt-laden merger will threaten the UK’s food supply, fuel prices and 100,000 jobs.
In a letter to the Secretary of State for Business and Trade, the union points out ASDA’s debts are already thought to be more than £4.7 billion and any potential acquisition by Asda of EG UK&I would give Asda total net debt of around £5 billion, according to a person familiar with the situation.
The £7 billion EG debt is due to be refinanced in 2025 when interest rates are likely to be significantly higher. On its refinancing announced yesterday, EG Group said: “This activity is expected to reduce total net debt from $9,801m in March 2023 to $5,375m post completion of the announced transactions, with net leverage to fall from 6.3x to 4.9x.”
Nadine Houghton, GMB National Officer said: “Our members that work for ASDA are rightly concerned about the future of their jobs when the companies’ owners keep on racking up more and more debt on the business.
“The multi million, elite partners who run TDR and the billionaire Issa brothers must be held accountable for their actions. We believe it is important the Government step in to ensure the regulator investigates any merger thoroughly. Allowing the deal to go ahead without proper due diligence would be deeply irresponsible.”
Asda is the UK’s third-largest supermarket, and is also owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital.
The £2.27bn deal will mean the acquisition of around 350 petrol stations and more than 1,000 food-to-go locations.
The resulting group would have around 170,000 employees, nearly 600 supermarkets and 700 petrol forecourts.
When the merger was annouced last week Asda chairman Stuart Rose said: “Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen.
“Throughout my career in retail, one thing has always been true – that meeting the evolving needs of customers is the route to growth.
“This transaction is all about driving growth by bringing Asda’s heritage in value to even more communities and accelerating the growth of its convenience retail business.”
Asda co-owner Mohsin Issa said that the deal would be “positive news for motorists, as we will be able to bring Asda’s highly competitive fuel offer to even more customers”.
