The billionaire Issa brothers are weighing up a merger of Asda and their petrol station business EG Group. 

The Blackburn-based entrepreneurs have been reviewing options to break up their sprawling global forecourt empire.

But they could merge the two businesses instead, valuing the combined entity at about $35bn (£26bn) including debt, Bloomberg News first reported. 

Other options include offloading hundreds of Australian petrol stations or listing the forecourts business. 

The Issas, who own EG Group alongside private equity firm TDR Capital, bought Asda for £6.8bn in October 2020. 

Last month it emerged that the supermarket chain would be lumbered with £500m more debt than previously anticipated after a deal to sell its own petrol stations collapsed. 

The brothers planned to transfer Asda’s forecourt business to EG Group as part of a complex deal that was meant to reduce the supermarket’s debt. 

An enlarged business would create a sprawling retail empire. 

The new owners have been rolling out “Asda on the Move” stores across EG Group’s petrol stations in the UK. 

And this week a new EG food quarter opened in an Asda store in Milton Keynes.  

The supermarket’s previous owner, Walmart, still holds a minority stake in Asda and may be required to give its blessing.

EG Group is now one of the biggest players in the fuel market, with almost 6,000 sites across Europe and the US.

The expansion has been marked by a series of debt-fuelled acquisitions.

Discussions are ongoing and there is no certainty they will lead to a transaction. 

Both firms will update the City on quarterly trading next week. 

EG Group and Asda both declined to comment.