The combination would create a retail giant worth between £11 billion and £13 billion ($13.6 billion-$16.1 billion) which would have more than 581 supermarkets, 700 petrol forecourts and 100 convenience stores in Britain, the newspaper said.
Brothers Zuber and Mohsin Issa and London-based private equity group TDR Capital have owned EG Group together since 2016.
They later bought Asda.
Asda and TDR Capital declined to comment.
The Issa brothers could not immediately be reached for comment.
Consumers 'Worse Off'
On the 11 November, 2022, Asda reported that the average British household was £142 (€163.7) worse off in October year-on-year, mainly due to the steep rise in energy costs.
Publishing its monthly Income Tracker survey, produced with the Centre for Economics and Business Research, Asda said after paying tax and essential bills the average household had £203 per week left – the lowest amount since August 2018.
Consumers have been cutting back on their spending as inflation has soared, hitting 11.1% in October.
In November last year, Britain's Office for Budget Responsibility (OBR) said UK household disposable incomes would fall by 4.3% in the current financial year and by 2.8% in 2023-24, the sharpest declines in records dating back to the 1950s.
That two-year slump would wipe out all the growth in living standards over the eight years to 2022, the OBR said.