Self-made British billionaire brothers ‘eyeing up Subway’
The self-made British billionaire Issa brothers who bought Asda are reportedly plotting an £8billion takeover of US fast-food giant Subway.
Mohsin and Zuber Issa, who made their riches after creating a petrol station empire, are said to be considering acquiring the global restaurant chain to add to their growing empire of wealth.
The pair who own EG Group already have Subway restaurants in some of their 6,300 petrol stations around the world, 340 of which are based in the UK, thanks to franchising deals.
But the Issa brothers are reportedly weighing up buying the chain outright, with a source telling The Sun: ‘EG Group have felt for a while that Subway treated them the same way as other franchise partners and their massive growth hadn’t been appreciated.
‘So what better way to show who’s boss than owning them’.
The business titans, who are the children of immigrants who moved to Blackburn from Gujarat, India, in the 1970s, saw a rapid expansion of their business after they teamed up with investment firm TDR Capital.
They started out with one petrol station in Bury, Greater Manchester, but then acquired several stations before embarking on their successful £6.8billion takeover of supermarket giant Asda in 2021.
The billionaire Issa brothers and the rise and rise of EG Group
1970s – Mohsin and Zuber Issa’s parents arrive to the UK from Gujarat, India, and the brothers are born not long afterwards in Blackburn, Lancashire.
They work at their parents’ petrol station before it closes.
2001 – The brothers buy their first filling station in Bury, Greater Manchester.
2015 – Private equity firm TDR Capital acquire a 50% stake in their Euro Garages chain.
2017 – Euro Garages buys EFR Group, a Dutch-based forecourt operator, and is renamed EG Group. The new company buys 1,000 garages from Esso in Germany.
2018 – EG Group announces it will buy 800 Kroger convenience stores in he US before buying 1,200 sites in Italy from Esso. Later that year it buys 97 fuel stations in the Netherlands and 540 from the Australian retailer Woolworths.
2019 – In another US expansion, EG buys 54 Fastrac sites in the US and 69 from Certified Oil.
2020 – EG becomes KFC’s largest franchisee in Europe after buying 145 KFC outlets in the UK & Ireland.
2021 – The Issa brothers buy Asda from Walmart for £6.8billion, bringing the supermarket back under British control.
The deal also included its chain of petrol forecourts.
It was thought Walmart was wooed by the Issas’ entrepreneurial flair and the potential to put Asda convenience stores in EG’s petrol stations.
Since then, EG Group has purchased food chain Leon, and has made a bid to add Caffe Nero to its collection of businesses.
They are also believed to have looked into a bid to takeover Boots.
The group also owns KFC’s biggest franchise, and has a close working relationship with the likes of Greggs, as well as Starbucks, Krispy Kreme and Cinnabon.
The Blackburn-born brothers were brought up in a terraced house after their father came to Britain to work in the textiles industry
Their woollen mill worker father Vali and mother Zubeda came from India ‘with nothing’ and were living in a two-up, two-down terraced house on Balaclava Street in Blackburn when Mohsin and Zuber were born in the early 1970s.
Their first experience of business was selling petrol from their parents’ filling station, where they would have their big idea that would revolutionise the industry and make their millions.
They took a lease on a local garage with their combined savings of £5,000 and in 2001, the brothers founded Euro Garages with a single petrol filling station in Bury, Greater Manchester.
Petrol sales were in decline and fuel duty was on the rise, cutting into already wafer-thin fuel margins and leading to hundreds of operators leaving the market.
At the time most garages – if they sold food at all – offered a measly selection of pre-packaged sandwiches, crisps, sweets and chocolate.
But the Issas realised fuel sales still had a purpose in creating a captive market at petrol stations, who could then be offered appetising food rather than the gruel offered elsewhere.
The brothers struck franchise agreements with brands including Starbucks, Subway and KFC, before embarking on a buying spree to snap up sites that had previously become vacant.
TDR Capital – a London investment firm behind We Buy Any Car and David Lloyd gyms – bought a 50 per cent stake in EG Group in 2015. The Issas retain the remaining 50 per cent.
Describing the secret of their success, Zuber told the Financial Times: ‘We wanted to create a destination where you could get fuel, food-to-go and shopping.
‘This is the formula and it works.
‘We were fortunate that the big players were leaving the market just as we were growing.’
In 2017, the pair purchased a £25million mansion in Knightsbridge, central London, which estate agents said could be worth £80 million when planned renovations are carried out according to estate agents.
Two years later, by 2019, they owned Europe’s largest forecourt operator, formerly known as Euro Garages, which had reported revenues of more than £17.9bn.
This prompted a debt-fuelled buying spree that saw the brothers buy thousands of new sites and expand into other 10 countries around the world.
In 2021, the brothers bought Asda from Walmart for £6.8billion, bringing the supermarket back under British control.
Mohsin and Zuber stunned the City by being named as lead bidders to take over the retail giant alongside private equity firm TDR Capital.
They committed to keeping the retailer’s headquarters in Leeds and said they would invest to grow its convenience and online operations.
Walmart retained a minority stake in Asda as part of the agreement.
