EG Group co-founder Zuber Issa, who last week agreed to acquire EG’s UK forecourt business in a £228m deal, will take on the foodservice outlets at 30+ locations, MCA understands.
This means franchise sites for Starbucks, Greggs, Subway, Cinnabon, Sbarro and Chaiiwala will come under the control of Zuber as part of a new entity distinct from the EG Group, the forecourts business he founded with his brother Mohsin.
Leon will remain under the control Asda, which the supermarket business acquired as part of its acquisition of EG UK in October 2023.
A number of Burger King franchise restaurants will also remain under Asda’s ownership after being acquired as part of the same deal last year.
On completion of the transaction, Zuber will step down as co-CEO of EG Group, with Mohsin Issa continuing to lead the business as sole CEO.
Asda and EG Group share the same chairman in Lord Stuart Rose and investor in TDR Capital.
As well as leading EG Group, Mohsin is currently in charge of the day-to-day running of Asda. He is searching for a new CEO, and reportedly offering a pay package of up to £10m.
In terms of what is remaining with EG Group in the UK, this includes a number of Starbucks franchise outlets, Cooplands, and EG’s electric vehicle charging business, evpoint.
EG Group sold its KFC franchise restaurants to Yum! Brands’ KFC Division in April 2024.
Meanwhile, TDR Capital has increased its investment in Asda by acquiring Zuber’s share in the business, with the transaction is set to complete in Q3 2024.
The deal brings TDR majority ownership of Asda with a 67.5% stake, alongside Mohsin’s 22.5% share, and Walmart’s 10%.
EG Group will use the proceeds from the divestment to pay down debt and strengthen its balance sheet following the significant deleveraging and refinancing activity last year.
Zuber and Mohsin co-founded EG Group in 2001, growing the business from a single site in the north of England to a global company with more than 5,500 locations.
It now has a diversified portfolio across three continents – North America, Europe and Australia.
The parting of ways follows speculation of a rift between the two brothers, as well as consternation over the debt pile accumulated as part of the Issa’s private equity-backed acquisition spree.
