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LONDON — Walmart said Friday that it has reached a deal to sell Asda, the British retailer it acquired in 1999, for an enterprise value of £6.8 billion (about $8.8 billion).

The purchasers are the Issa brothers, founders and co-CEOs of the EG Group, a global convenience store retailer based in Blackburn, U.K., and investment funds managed by the British private equity firm TDR Capital LLP. Walmart will retain a stake in Asda, which aims to expand by supplementing its large supermarkets with smaller neighborhood shops.

“We are delighted to be able to announce this deal today, which we believe creates the right ownership structure for Asda, building on its 71 year-heritage, whilst bringing a new entrepreneurial flair, not only to Asda, but also to U.K. retailing,” Walmart International president and chief executive officer Judith McKenna said in a statement. “I’m delighted that Walmart will retain a significant financial stake, a board seat, and will continue as a strategic partner. Asda has been a powerhouse of innovation for the rest of the Walmart world, and we look forward to continuing to learn from them in the future. This important combination will continue to keep customers and colleagues at Asda’s heart, which is important to us all.”

The deal is subject to regulatory approvals and is expected to close in the first half of 2021.

Walmart says that Mohsin and Zuber Issa, backed by TDR Capital, will support and accelerate Asda’s existing strategy, which is anchored in delivering low prices and convenience to customers however they want to shop. Under the new ownership, Asda will continue to work closely with suppliers to provide the best value for customers in the categories that matter most to them.

Asda will remain headquartered in the English city of Leeds, and will continue to be led by current chief executive officer Roger Burnley, who will sit on Asda’s Board along with representatives appointed by the Issa brothers, TDR Capital and Walmart.

Besides accelerating Asda’s existing strategy, vowing to invest £1 billion in the business, the Issa brothers will bring significant expertise to the business, according to Walmart, which says they are well-positioned to support Asda in developing a compelling convenience retail proposition and taking it to market, and to advise on the development of strategic brand partnerships that will better enable Asda to address multiple consumer missions. Through these and other initiatives, the Asda leadership team and the company’s new ownership will be focused on building a differentiated operating model that will drive competitive outperformance and long-term growth.

Walmart says that under its new owners, the business will:

  • Support the current management team, led by Roger Burnley
  • Maintain competitive pay levels for Asda colleagues, and continue to provide exciting and enriching employment opportunities
  • Invest over £1 billion in the next three years in Asda to further strengthen the business and its supply chain
  • Continue to offer low prices across its stores and product categories for its customers
  • Ensure Asda remains a price leader in the supermarket fuel sector
  • Increase the proportion of UK-based suppliers, increasing the volume of products – such as chicken, dairy, wheat and potatoes – purchased from UK suppliers each year, as well as a commitment to source 100% British beef
  • Retain Asda’s industry-leading payment terms for suppliers
  • Enjoy the continued support and involvement of Walmart as an investor and partner, allowing Asda access to global innovation and buying power
  • Maintain its commitment to its Create Change for Better program, which helps people living below the poverty line in the UK and supports local communities, among other good causes.

“This new ownership opens an exciting new chapter in Asda’s long heritage of delivering great value for UK shoppers. With our combined investment, expertise and ambition; Asda, Walmart, the Issa brothers and TDR have an incredible opportunity to accelerate our existing strategy and develop an even more exciting offer for our customers as well as strengthen our business for our colleagues. In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth. For Asda colleagues, a strong and growing business is important for our long-term future. I want to thank every single one of our people for the incredible work they do serving our communities, and together our focus will remain on building a better Asda for the benefit of all.”