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.
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
The private equity firm is also heavily invested in the Issa brothers’ petrol station forecourts business, EG Group.
Zuber Issa 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.
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 Issa 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.”
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.
Meanwhile, the GMB union said the deal would spell bad news for shoppers and staff, accusing TDR Capital of “asset-stripping” at the supermarket.
The union has previously claimed the owners slashed an estimated eight million staff hours from the shop floor in the business to boost profits.
Asda denied the claims at the time, pointing to investment in stores and the launch of the supermarket’s loyalty app, Asda Rewards, as evidence that the company is growing.
On Friday, Nadine Houghton, GMB national officer, said: “TDR Capital have serious questions to answer about their asset-stripping of Asda.
“Their private equity ownership has already been bad for consumers – with Asda now the most expensive retailer for fuel – and bad for staff, with millions of working hours cut from the shop floor.
“Further involvement from TDR can only spell more bad news. Bosses must change course to protect Asda workers and stop this British retailer further losing more market share.”
Asda was named the UK’s most expensive supermarket fuel retailer earlier this week, according to RAC analysis.
An Asda spokesperson said the supermarket disputes the findings of the fuel survey.