News that one of the billionaire Issa brothers had decided to sell his shares in supermarket giant Asda marked the end of an era for some of the most successful self-made businessmen in the UK. But how the Issa brothers started their empire
Mosin and Zubar Issa were born in Blackburn, Lancashire, in the early 1970s. Their parents, Vali and Zubeda, moved to the UK from Gujarat, India, in the decade before, initially to Bradford, to work in the textile industry before turning their hands to running a petrol station.
It was in the toilets of that petrol station that the brothers said they had the idea of transforming it into a “shopping destination” They realised there was little profit to be made from selling petrol but that the site had a captive market of drivers and passengers.
The idea led the brothers to save up the £150,000 they needed to buy their own forecourt in Bury, Greater Manchester, in 2001. Their move coincided with the oil giants attempting to offload their forecourts and the brothers pressed home their advantage.
What happened next
The brothers continued to expand their business, Euro Garages, across the country, snapping up forecourt sites where they saw an opportunity. They formed partnerships with brands including Subway and Starbucks and revamped their sites, which in most cases had become tired and outdated.
By 2015 the business had expanded so much that it caught the attention of private equity giant, TDR Capital. The firm, whose portfolio has featured the likes of David Lloyd Leisure, Keepmoat Homes and Stonegate Pub Company, took a stake in the company.
The move marked the start of a partnership which would see the fortunes of the brothers’ business transformed.
The impact of private equity
The first major change happened a year later when Euro Garages acquired the Dutch-headquartered European Forecourt Retail Group to create Intervias Group, which was later renamed EG Group.
The business had been founded in 2007 and was the European energy retail and marketing arm of Delek Group before it was acquired by TDR Capital in 2014.At the time, EFR comprised over 1,100 retail sites in Benelux and France.
As a result the private equity firm took a 50 per cent stake in the newly-formed group, with the Issa brothers holding 25 per cent each. But that was only the start of the expansion the brothers and their private equity partners had planned with various acquisitions being made in the years since.
Asda and onwards
Owned by US giant Walmart since 1999, the Issa brothers teamed up with TDR Capital to acquire Asda, the supermarket giant. The deal was completed in 2021 after EG Group also agreed to buy Asda’s forecourts business for £750m in February.
The brothers made their move for Asda after the Competitions and Markets Authority rejected its merger with Sainsbury’s, a deal which is best remembered for Sainsbury’s CEO Mike Coupe being filmed singing “We’re in the Money” after the deal was initially announced.
Recently, City A.M. reported that EG Group surged back into the black in 2023 following its £2bn deal with the supermarket giant. EG Group completed the sale of the majority of its UK and Ireland operations to Asda in October last year, having first announced the deal in May 2023.
The deal saw the group’s UK&I fuel, foodservice, grocery and merchandise business taken on by Asda.
EG Group now operates in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium – with its 32 sites in the UK being sold to Zubar Issa.
Click on the following link to get the full story Issa brothers: How to turn a petrol station into an empire (cityam.com)
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