Walmart has reportedly picked 2 gas-station billionaire brothers as preferred bidders for Asda, its $8.4 billion UK grocery chain

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  • Walmart has chosen a private equity firm and two billionaire brothers behind a gas station chain as preferred bidders in the sale of its UK supermarket chain Asda, Sky News reported.
  • The bid comes from TDR Capital and brothers Mohsin and Zuber Issa, who own the Euro Garages gas station chain.
  • Walmart has owned Asda, which has 600 stores, for 21 years.
  • A deal could draw the attention of competition regulators because of potential domination of the gas station industry, Andrew Taylor, co-founder of merger and competition advisory firm Aldwych Partners, told Business Insider.
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Walmart has reportedly chosen two billionaire brothers behind a gas station chain as preferred bidders for its $US8.4 billion UK grocery business Asda, following a board meeting on Saturday.

While there isn’t yet a formal deal, sources told Sky News that a bid launched by private equity firm TDR Capital and brothers Mohsin and Zuber Issa, who own the Euro Garages gas station chain, is the leading contender.

The deal is expected to value Asda, the UK’s third-largest supermarket chain, at around £6.5 billion ($US8.4 billion).

It would return Asda, which has been owned by Walmart for 21 years, to UK ownership. But it could draw attention from competition regulators because of potential domination of the gas station industry, Andrew Taylor, co-founder of merger and competition advisory firm Aldwych Partners, told Business Insider.

The UK Competition and Markets Authority (CMA) is “likely” to look into whether the transaction could reduce competition in areas where both Asda and Euro Garages operate, Taylor said. “While the CMA is unlikely to block the deal, it may require some divestments.”

Euro Garages owns nearly 6,000 gas forecourts across 10 countries, and recorded $US20 billion ($US25.8 billion) in revenue in 2019.

Walmart chose the bid over one by US private equity firm Apollo, sources told Sky. A third private equity firm, Lone Star, dropped out of the bidding earlier this month.

Asda is the UK’s third-largest supermarket chain with more than 600 stores. It also offers financial services and mobile phone contracts.

Last year, the CMA blocked a merger between Asda and Sainsbury’s, the UK’s second biggest supermarket, over concerns that it would lead to increased prices in stores, online, and at gas stations. The regulator also feared the deal would worsen the quality and range of products.