EG Group, a privately owned operator of petrol forecourts and fast food franchises, has emerged as the preferred bidder in the race to buy Asda, the UK’s third-largest supermarket chain.

It emerged this week that Walmart, the US retail giant which owns Asda, has selected EG Group as the preferred bidder for the UK supermarket chain in a deal that values Asda at £6.5bn (€7.1bn).

It’s understood EG Group edged ahead of private equity firm Apollo Global Management in the race to buy Asda because it plans to expand the supermarket by integrating Asda convenience stores with its chain of petrol forecourts in the UK. Asda already controls a near 15% share of the £185bn (€210bn) grocery market in the UK.

Headquartered in Blackburn, EG Group operates almost 6,000 sites in the UK, US, Europe and Australia. The privately owned company is believed to be worth as much of £10bn (€11bn) having grown through a number of acquisitions over the last 20 years, including buying up a major KFC franchise in the UK and the Little Chef chain of restaurants.

Walmart has been on the lookout for a new buyer for Asda after the UK competition authority blocked a proposed €8.5bn merger between Asda and Sainsbury’s, the UK’s second-largest supermarket chain.

Had it gone ahead, the Sainsbury’s-Asda merger would have created the largest supermarket in the UK with a combined 31% share of the UK grocery market.