Clayton, Dubilier & Rice’s takeover of grocery giant Morrisons has hit a snag after the Competition and Markets Authority (CMA) raised concerns over the impact the move would have on fuel prices.
New York-based private equity giant CD&R owns Motor Fuel Group (MFG), the largest independent petrol forecourt operator in the UK, which runs 921 forecourts across England, Wales and Scotland.
Morrisons operates 339 petrol forecourts in the UK, the majority of which are tied to one of its supermarkets.
The CMA said it found in its first investigation into the takeover, which began in January, competition concerns over the supply of petrol and diesel for customers in 121 areas across the country.
The watchdog said these are areas where both MFG and Morrisons currently operate a petrol station and would face limited competition as a result of the merger, which could drive up prices for customers.
CD&R has five days to address the CMA’s concerns and a further five in which to consider whether to accept these in principle or move to a phase two investigation.
CMA senior director of mergers Colin Raftery said: “Prices for petrol and diesel have recently hit record highs, which makes it even more important that we don’t allow a lack of competition at the pump to make the situation worse.
“We’re concerned that this deal could lead to higher prices for motorists in some parts of the country. But if CD&R and Morrisons are able to address these concerns, then we won’t need to move on to an in-depth investigation of the merger.”
Separately, Morrisons has struck a deal with US on-demand delivery start-up Gopuff, through which Gopuff will sell the grocer’s products on its app in 20 UK cities. Morrisons will wholesale to Gopuff, CNBC reported.
Morrisons chief executive David Potts said: “This partnership will enable us to deliver a very strong range of Morrisons fresh food and customer favourites to front doors across the UK in a matter of minutes.”
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