Zuber Issa has sold his stake in Asda to the supermarket chain’s private equity backer TDR Capital.

The sale brings TDR Capital’s share in the supermarket group to 67.5%, while 22.5% is still owned by Zuber’s brother, Mohsin.

The deal is set to complete in the third quarter of this year, the company said on Friday.

Zuber and Mohsin Issa bought Asda from Walmart in 2020, in a £6.8 billion deal with the backing of TDR Capital. Walmart still holds a 10% stake.

The private equity firm is also heavily invested in the Issa brothers’ petrol station forecourts business, EG Group.

The announcement came on the day it was revealed Zuber will also step down as co-chief executive of EG Group after reaching an agreement to buy its remaining UK forecourt business and some food service sites for £228 million.

Zuber Issa to step down as EG Group CEO following £228m deal

EG Group said it will use the cash to repay debt and shore up its balance sheet.

Zuber will keep his shareholding in EG Group and continue as a non-executive director, while his brother Mohsin will become sole CEO.

Zuber said: “With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours.

“I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions.”
 
Mohsin said: "Today's announcement further underlines my own and TDR's confidence both in Asda and the UK consumer market. As a shareholder group, we are excited about the growth journey we are on. Asda is an iconic British brand and we are committed to setting it up for long-term success and delivering great value for customers across the UK. 

“To that end, I am incredibly proud of the investments we have already made in transforming the Asda business, including the launch of the new Asda Express convenience format, the Asda Rewards customer loyalty scheme and the £800m investment in a best in class IT infrastructure to bring new data and insight capabilities. 

“Above all, I am proud and grateful for the everyday commitment and loyalty of our Asda colleagues and their dedication to our customers. I also want to add my personal support and best wishes for Zuber’s plans as we continue our successful family partnership, working as partners on our personal co-investments, family office philanthropy and Issa Foundation projects.”

Chairman at Asda, Stuart Rose said: “On behalf of the Board, I welcome TDR’s increased investment in Asda – which is a clear sign of its commitment to the business. 

"Asda’s heritage is in delivering great value for customers on a daily basis across its entire proposition from groceries to fashion and food-to-go – and the Board has never been more committed to deliver on this promise. 

"The Board and shareholders continue to put in place the building blocks to position Asda for long-term success and that is good news for colleagues, customers, suppliers and other business partners.”

Gary Lindsay and Tom Mitchell, managing partners of TDR Capital, said: “We first invested into Asda over three years ago, seeing a huge opportunity to cement its position as one of the UK’s leading retail brands.”

“As majority owners, we will continue to work closely with the Asda management team and colleagues across the business to support the ambitious strategy, which we believe is the right one to continue to move Asda forward.”

The deal comes as Asda continues its hunt for a chief executive after Mohsin Issa handed over the running of the supermarket as part of a revamp of the chain.
Mohsin said earlier this year that he was carrying out a “reset” of the company before hiring a new chief.

In April, Asda revealed its underlying earnings swelled by a quarter last year with growth in food and clothing sales.