US retail giant Walmart has agreed to sell its British supermarket chain Asda to two UK firms for €7.4 billion, it announced on Friday.

The Issa brothers, who run petrol stations and food outlets worldwide, have joined private equity firm TDR Capital to purchase Asda, which last year regulators blocked from merging with British supermarket group Sainsbury’s.

While the UK groups are acquiring a majority stake in Asda, Walmart will retain a share and have a seat on the new board, the statement added.

“I’m delighted that Walmart will retain a significant financial stake... and will continue as a strategic partner," said Judith McKenna, CEO of Walmart International. 

Brothers Mohsin and Zuber Issa said “Asda’s performance through the COVID-19 pandemic has demonstrated the fundamental strength and resilience of the business”.

Asda’s performance through the COVID-19 pandemic has demonstrated the fundamental strength and resilience of the business- Brothers Mohsin and Zuber Issa

The transaction, subject to regulatory approvals, is expected to complete in the first half of next year.

“We are proud to be investing alongside Mohsin and Zuber, who have built EG Group into a global convenience retailer,” said Gary Lindsay, a partner at TDR Capital.

Walmart bought Asda in 1999.

“In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth,” said Asda chief executive Roger Burnley. 

While the UK has shed tens of thousands of jobs during the coronavirus pandemic, the country’s supermarket sector has embarked on a huge recruitment drive to meet surging demand for online food shopping.