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Here’s how you can buy Asda in a halal way

The Issa brothers made headlines earlier this week after buying Asda in a deal valuing the company at £6.8bn. From a business perspective, it is amazing to see what the brothers have achieved. They started from one petrol station and ended up buying one of the largest supermarket chains in the country.

I’ve written a more detailed article on how this deal was structured, together with an Islamic finance analysis of it.[1] Whilst conventional finance may have been used in this instance (which of course we do not condone), I am optimistic for the future of Muslims in business. This is because the Issa brothers started their business, EG Group, in a world where Islamic finance was not as prevalent or well-established as it is today.

In this article, I will map out briefly how another world in finance is now possible – a world where Muslims can use halal finance to get ahead and stay ahead. I will map out a Muslim business success story from cradle to IPO, highlighting a wide variety of financing that will be needed by such a business throughout this journey.

But first, let’s clarify why we even care about trying to get ahead.

Muslims should get rich if they can

Being the owner of one of the ‘Big Four’ supermarkets in the UK is an incredibly influential position. Supermarkets play a vital role in keeping the country fed and well-stocked. This issue became very apparent during the early days of the COVID-19 pandemic.

Historically, Muslims have not had a seat at this table – now, this has changed.

Aside from the influence, there is a massive economic boon too. Every business employs people, brings communities together, catalyses wider activity throughout its supply chains, and pays 20% of its profits as tax.

Imagine if this repeated itself in all types of sectors. Imagine if Muslim founders were in charge of a company like Google, Facebook, Amazon, Microsoft, Netflix, or HSBC. These companies dominate our every living moment, and they are hugely influential in the political sphere too, with balance sheets larger than the GDPs of many countries combined.

Muslims should try to become rich if they can.

Of course, not everyone is suited to become mega-rich. Our relationship with wealth must be informed by our own personalities too. For more on whether becoming super-rich is right for you, see this white paper.[2]

Flavours of finance

Now that we’ve decided that being rich could be a potentially rewarding pursuit both in this life and the next, let’s work out where financing fits into all of this.

Step 1: Start-up Funding

When you set up a business from scratch, you will usually need a bit of start-up capital. This comes in two flavours:

  1. Flavour One: Technology-based start-up. For this type of business, you’ll be raising from the venture capital community. The funding will all be equity[3] so is (mostly) halal. Here’s some pitfalls to watch out for on this route.[4] Islamic Finance Guru (IFG) are tackling this type of funding through our angel syndicate of investors at IFG.VC.[5] Every month, we fund 1-2 start-ups (mostly Muslim and BME-owned) with an average investment of around £250k.
  2. Flavour Two: Your normal brick-and-mortar business (e.g. a pharmacy). For this, you’ll usually be buying out an existing pharmacy. In these kinds of businesses, margins don’t allow for equity investments, so the only way to go about buying your own pharmacy is by accessing some sort of debt finance. Currently, there is an absence of anything Islamic available. We think this is a crying shame, but if you’re persistent, you can hack a solution which usually involves sourcing your own private financiers, or relying on friends and family.

Step 2: Revenue-based finance

Now that you’re up and running, you realise that selling equity in the business is not a long-term solution.

Perhaps you’re running a business where you sell plastic toys online. You know that if you spend £500 on ads on Google and Facebook, you will make sales of £1000. You’re only really restricted by the ad money you have to spend.

To sell equity in your business for this capital is expensive – you’d be much better off doing a revenue-share arrangement.

Clearbanc is a main mainstream provider of such finance, and they are actually working on a halal version at the moment. Another provider is Izdihar,[6] and although it is early days for them, it looks like we could have a solution here in the near future.

Step 3: Leveraged buyout (LBO) finance

Now that you’re well-established and you’ve brought your business to maturity, the only way for you to expand is through acquiring other companies and consolidating them all into one big group and take advantage of economies of scale.

The mainstream way of doing this by using a leveraged buyout (LBO).[7] You can use an Islamic LBO if the deal is worth north of £50m. Most mainstream banks will be open to structuring their terms in a halal way for that level of financing.

For a deal worth under £50m, you still have a bunch of options:

  • You can pay in cash for the acquisition.
  • You can arrange an earnout so that you pay the seller from the earnings of the business you acquire.
  • You could arrange halal finance through private networks.
  • If the target-business is an asset-rich business, you could use asset finance, which is often capable of being Shari’a-compliant.

Congratulations! At this point, you’re ready to be listed on the stock market through an IPO – and you’ve done it in a completely halal way.


It is possible to avoid haram debt if you really try. I hope this article has at least sketched out how this is possible.

I have covered three main types of finance, but there are many other types out there that are not fully catered for right now. These include revolving facilities, term loans, and property finance.

Nevertheless, there is hope here too. Companies like Qardus, Offa, and Nester have either just launched or will shortly launch their services to address some of these issues in shā Allāh.

Islamic finance is not yet at the quality and scale of mainstream finance by any stretch. It’s not as easy to be rich by using Islamic finance to do it, but for the first time, it is possible.

Source: www.islam21c.com


[1] https://www.islamicfinanceguru.com/general/the-inside-story-to-the-asda-takeover-how-muslims-should-respond/

[2] https://www.islamicfinanceguru.com/entrepreneurship/whitepaper-is-it-wrong-to-be-rich-in-islam/

[3] Equity financing is where you raise money for your business by selling shares in the company.

[4] https://www.islamicfinanceguru.com/islamic-finance/are-preference-shares-halal/

[5] https://ifg.vc/

[6] https://izdhr.com/

[7] A leveraged buyout is a strategy used by private equity firms where they fund the acquisition of the target company through a large amount of debt – often up to 80% of the target price. The buyer then uses the profits from the target company (which it now owns) to pay back lenders.

About Ibrahim Khan

Ibrahim holds a BA in Philosophy, Politics, and Economics from the University of Oxford, an Alimiyyah degree from the Al-Salam Institute, and an MA in Islamic Finance. He was previously a private equity/venture funds lawyer in the City. He is the co-founder of Islamicfinanceguru.


  1. So will they be geting rid of alcohol and pork etc from Asda?

  2. Can anyone define ‘halal Islamic finance for me, please?

    Since Islamic banks and other lenders work within the dominant capitalist interest based economy, how can there be any viable Islamic alternative? The clerical community is also divided on finance options with some in favour and some not. Some Clerics get paid to give fatwa in favour of certain products!

  3. Let’s fave reality, there’s barely any viable Islamic finance options here in the U.K.
    the shariah lenders have no desire to expand

    • Brother/Sister Y D there are many Islamic finance options available in the U.K. including Al Rayan Bank, Ansar Finance, Qardus, IFG.vc, Gatehouse Bank and Kestrl. Please check their descriptions and reviews at their company websites or alternatively read their reviews on https://www.islamicfinanceguru.com/.

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