Who are the billionaire Issa brothers?
- Published
Zuber and Mohsin Issa started out with one petrol station
Two UK billionaire brothers - who made their money in petrol stations - have struck a £600m deal to expand their fuel forecourt empire.
Zuber and Mohsin Issa's EG Group, which owns Britain's third largest supermarket, Asda, agreed to buy the Co-op's 129-strong petrol forecourt business.
The latest acquisition, however, has been seen as a move to expand Asda's presence in smaller, convenience grocery stores, following the likes of Tesco and Sainsbury's.
The Issas have experience in retail. Their empire includes more than 6,300 convenience, retail and petrol forecourts, mainly in Europe and the US.
The Blackburn-based brothers have been on a buying spree recently, which culminated in them snapping up Asda and fast food chain Leon.
They recently narrowly missed out on buying the struggling convenience store chain McColl's, losing out to Asda rival Morrisons.
There were also reports they had their eye on a takeover of pharmacy chain Boots, before US pharmacy giant Walgreens dropped plans to sell the chain, saying buyers were unable to raise enough funds due to instability in financial markets.
So who are the Issas and what are their plans for the UK High Street?
Rapid rise
The Issa brothers founded EG Group (initially called Euro Garages) in 2001, expanding it from a single petrol station in Bury, Greater Manchester.
The business grew rapidly as the major oil companies sold off or closed their High Street petrol stations to concentrate on production and refining.
The Issas were quick to spot an opportunity to add more retailing to their petrol stations. Motorists are now being offered a huge range of services when they stop by for fuel, from coffee to fast food to groceries.
The brothers bought Asda in 2020
EG Group employs more than 53,000 people, almost 20,000 of them in the UK. In March, the firm said it planned to create nearly 23,000 more jobs in the UK over five years.
The brothers own half of the group, with the remainder owned by TDR Capital, a private equity firm.
According to their latest results, EG Group revenue for the year to December 2021 rose by 23.5% to $26.5bn (£21.1bn).
The Sunday Times values the brothers' fortune at £4.73bn, external.
They make donations through their own charitable foundation, which funds projects in the UK and abroad.
'Buying spree'
The Issa brothers have snapped up a number of well-known High Street brands in recent years.
In 2020, it was announced they had won the battle to buy Asda from US supermarket giant Walmart, in a deal valuing the UK grocer at £6.8bn. It meant Asda returned to majority UK ownership for the first time in two decades.
The brothers were both awarded CBEs after the news.
The brothers tried to buy Caffè Nero in 2020
Last year, the Issa brothers bought the British fast food chain, Leon.
The deal, worth up to £100m, includes 42 company-owned restaurants, as well as 29 franchise sites which are mainly found in airports and train stations across the UK and a handful of European countries such as the Netherlands and Spain.
"It has been a buying spree," says Richard Hyman, an independent retail analyst.
"The Issa brothers have a clear appetite for risk and the access to finance to drive that," he added. "If you look at Asda and Leon, it's clear they are making acquisitions in complementary and adjacent market places, so what they're doing is synergistic."
Zuber and Mohsin Issa claim an award
Despite their rapid rise in the business world, the brothers don't always get what they want.
In 2020, their efforts to take over Caffè Nero fell through, with the coffee shop chain dismissing the bid as "opportunistic".
And in May, Morrisons clinched a last ditch deal to buy the convenience store chain McColl's, beating EG Group to the prize.
But Mr Hyman says he expects to see further acquisitions from the Issa brothers, as the economic outlook darkens.
"We are about to go into a recession, the market is tightening, and it's already oversupplied with players," he said. "So what we're going to see is a lot of casualties and that will present opportunities along the way."
Controversies
The brothers have experienced controversy in the past.
Questions were raised about EG Group's governance after its auditor, Deloitte, suddenly quit in October 2020 and was replaced by KPMG.
EG Group said the auditor had signed a "clean audit" for EG Group's 2019 financial accounts and there had been "no disagreements on any auditing or accounting matters".
In December 2020, a BBC investigation found a company once co-owned by the Issa brothers was fined for "appalling" safety breaches.
One worker at the Lancashire packaging firm Europlast (Blackburn) lost a finger in a bubble wrap machine in 2012. Mohsin and Zuber Issa were co-owners and directors of the company at the time, according to filings at Companies House.
Another worker lost four fingers in 2015, weeks after the brothers resigned as directors.
It is understood the brothers haven't been involved with Europlast since 2015, didn't have operational roles and have not been shareholders in Europlast for many years.
A representative of Mohsin and Zuber Issa declined to comment.
The Issas also faced questions in their home town when they bought eight homes, demolished them and began building five mansions, raising the ire of neighbours, the Lancashire Telegraph has reported, external.
The brothers are said to be quite publicity-shy, with industry insiders saying they like to keep a low profile.
This might change though, Mr Hyman says, as they continue to snap up well-known brands which raise their profile.
"They like to keep their heads below the parapet, but they might not be able to continue that way, especially the way they're going," he says.
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