CD&R clears final hurdle for £7bn Morrisons acquisition

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Clayton, Dubilier & Rice (CD&R) has been given the all-clear to complete its £7bn acquisition of Morrisons after the competition watchdog agreed to its offer to sell some petrol forecourts.

Morrisons Swansea exterior

CD&R won an auction to buy Morrisons last year but faced objections from the Competition and Markets Authority

The US private equity firm won an auction to buy the grocery giant last year, but concerns had been raised by the Competition and Markets Authority (CMA) over its ownership of petrol forecourt group Motor Fuel Group (MFG).

MFG is the largest independent petrol forecourt operator in the UK with 921 forecourts. Morrisons owns 335 fuel outlets in England, Scotland and Wales, which would have given CD&R control of more than 1,200 of the UK’s 8,000 forecourts.

The CMA had raised potential competition concerns in 121 areas where MFG and Morrisons both owned forecourts, but has agreed to CD&R’s offer to sell 87 petrol stations.

The watchdog added that the proposal appeared “to be suitable to restore the loss of competition brought about by the deal across each of the 121 local areas in which the concerns were identified”.

The CMA said it would also have a say in approving the buyers of the 87 petrol stations.

CD&R senior adviser Sir Terry Leahy said: “We welcome today’s announcement and the CMA’s thoughtful engagement throughout the process. We are delighted to be supporting Morrisons on the next stage of their journey and to be working closely with the team to grow the business and provide quality, value, service and choice – shopping-trip attributes that have long been the company’s tradition.”

Morrisons also welcomed the CMA’s decision to wave through CD&R’s acquisition, with the watchdog having first launched an investigation in January.

The grocer’s chief executive David Potts said: “I am pleased the acquisition has cleared the final regulatory hurdle and we can now work closely with CD&R on the path ahead.

“Following hard on the heels of Covid, the cost-of-living crisis is another critical period for food retailers in the UK and there is important work ahead of us as we look to help customers and colleagues through these difficult economic times.”