Asda has assumed control of the Leon restaurant chain following a £2 billion transaction to purchase a substantial portion of its affiliate, EG Group's UK operations.
Leon Restaurant, Old Compton St by Chris Holifield, CC BY-SA 2.0, via Wikimedia Commons
The retail behemoth intends to incorporate the Leon marque within its outlets, marking a strategic entry into the food service sector.
In the wake of the agreement, Asda will inherit the management of 462 franchised eateries, including Greggs, Burger King, and Subway.
The completion of the deal, initially disclosed in May, was finalised on the 31st of October.
Both Asda and the petrol station network EG Group are owned by billionaire siblings, the Issa brothers, in conjunction with the private equity firm TDR Capital. The proceeds from the transaction are designated to contribute towards reducing EG's debt whilst also providing a stimulus for its continued growth on the international stage.
While EG Group maintains its operations across the United States, Australia, Germany, France, Italy, and the Netherlands, it will keep possession of the Cooplands bakery enterprise, acquired in 2021, along with franchise partnerships with Starbucks, KFC, Sbarro, Chaiiwala, and Cinnabon.
According to Asda, this acquisition is poised to forge a conglomerate with a fusion of food service, grocery, fuel, and retail offerings, projecting a combined turnover close to £28 billion and anticipated to cater to 21 million customers each week.
"This transaction is fundamentally about expansion, amalgamating the synergistic capabilities of Asda and EG UK," remarked Gary Lindsay, a managing partner at TDR Capital.
"We are cultivating a more diversified and enhanced Asda enterprise, one that is poised to consistently deliver superior value to its patrons both within physical outlets and through digital channels."
EG took over Leon, initially established by John Vincent, Henry Dimbleby, and Allegra McEvedy, in 2021 and has subsequently inaugurated several drive-through establishments under this brand.