Asda to take ownership of Leon in £2b EG Group deal

Asda is to take over ownership of the Leon restaurant chain as part of a £2.27b merger between the retailer and its sister company EG Group.

The supermarket giant said yesterday (30 May) it had agreed to buy EG's UK and Ireland business, which includes over 1,000 food-to-go locations and around 350 petrol filling stations.

Both companies are owned by the billionaire Issa brothers and private equity group TDR Capital and the proceeds will be used to repay EG’s debts as it faces soaring interest rates on its loans.

Once the deal goes through it is understood the wider EG group will retain ownership of the Cooplands bakery chain, which it bought in 2021, while Asda will own Leon.

Asda plans to invest more than £150m over the next three years to integrate the combined business, which could see Leon restaurants open within the supermarket giant’s estate.

However, the exact ownership of other foodservice brands in EG’s wider portfolio, which includes franchised KFC restaurants, remains uncertain.

EG will continue to operate its international business and retain around 30 of its UK and Ireland petrol station sites, alongside other foodservice brands, the company said.

Asda will continue to be led by co-owner Mohsin Issa alongside chief financial officer Michael Gleeson. The retailer has begun a search for a new chief executive officer to oversee the growing business.

Stuart Rose, chair of Asda, said: “Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen.

“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.”

The deal is expected to complete in Q4 of 2023.

EG acquired Leon, which was founded by John Vincent, Henry Dimbleby and Allegra McEvedy, in 2021 and has since opened several drive-through locations under the brand.