Billionaire brothers Zuber and Mohsin Issa of EG Group have offloaded their £367 million Italian division.

EG Group Sells Italian Division for €425m as Part of Strategic Shift

In a significant move, EG Group, the Blackburn-based multinational convenience retailer and petrol forecourt operator, has sold its Italian division, EG Italia, for €425m (£367m). The sale, agreed with a consortium consisting of PAD Multienergy S.p.A., Vega Carburanti S.p.A., Toil S.p.A., Dilella Invest S.p.A., and GIAP s.r.l, marks a strategic shift for the company.

The sold division, EG Italia, has been operating under the culture of Esso Italiana since 2018. EG Group, co-founded by billionaire brothers Mohsin and Zuber Issa and now co-owned by private equity giant TDR Capital, announced that this move is part of its strategy to focus on core markets and strengthen its balance sheet.

Russ Colaco, CEO of EG Group, stated that the sale is aligned with their growth strategy and deleveraging programme. The deal in the autumn of 2023 saw EG Group sell its remaining UK forecourt business and certain foodservice locations to co-founder Zuber Issa for £228m. Following the deal, Zuber Issa stepped down from his role as co-chief executive and became a non-executive director.

The consortium acquiring EG Italia plans to generate synergies for the development of fuel stations and expand services, including those related to energy transition. The transaction is subject to antitrust and other regulatory approvals, with completion expected by the end of 2025.

EG Group's pre-tax profit was slashed from $1.4bn to just $10m in 2024. The group's sales had declined as a result of the fall in fuel prices and the impact of its divestments over the past two years. Before those exceptional items, the group made a pre-tax loss of $195m but it generated a profit of $205m from divestments. In 2023, the group made a pre-tax loss of $125m before exceptional items which generated a profit of $1.5bn.

The change to EG Group's pre-tax profit was "largely driven by the material exceptional gain from the divestment of the majority of the UK business in October 2023". Zuber Issa, one of the co-founders, previously suggested selling the company's US arm instead of floating the entire group in New York. At the same time, Zuber Issa sold his shares in Asda to TDR Capital, making the private equity giant its majority shareholder.

Moshin remains a significant shareholder in Asda. EG Group expressed gratitude to its Italian colleagues for their hard work and dedication, and wishes the business continued success in the future. The group's revenue declined from $28.3bn to $24.1m over the year.

This sale is a significant step for EG Group as it continues to restructure and focus on its core markets. The company's strategic decisions will be closely watched in the coming months as it navigates its path forward.

Billionaire brothers Zuber and Mohsin Issa of EG Group have offloaded their £367 million Italian division.