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New Morrisons owner avoids deal probe with petrol station sale
Global Banking & Finance Review®
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LONDON (Reuters) -Britain’s competition regulator has proposed to accept an offer from supermarket group Morrisons’ new private equity owner, Clayton, Dubilier & Rice (CD&R), to sell 87 petrol stations to address concerns over higher fuel prices, it said on Tuesday.
LONDON (Reuters) -Britain’s competition regulator has proposed to accept an offer from supermarket group Morrisons’ new private equity owner, Clayton, Dubilier & Rice (CD&R), to sell 87 petrol stations to address concerns over higher fuel prices, it said on Tuesday.
CD&R completed its 7 billion pound ($8.8 billion) purchase of Morrisons, Britain’s fourth biggest grocer, last October.
However, in March the Competition and Markets Authority (CMA) told CD&R that if it did not address its concerns that the deal could lead to higher fuel prices in 121 local areas across the United Kingdom it would face an in-depth investigation into the deal.
CD&R is the owner of the Motor Fuel Group (MFG), which is the United Kingdom’s largest independent operator of petrol stations, with 921 to Morrisons’ 339.
To address the CMA’s concerns, CD&R offered to divest 87 of MFG’s petrol stations.
“The sale of these petrol stations will preserve competition and prevent motorists from losing out due to this deal, which is particularly important when prices have recently hit record highs,” said Colin Raftery, senior director of mergers at the CMA.
If the CMA concludes that the competition issues have been addressed following a consultation on CD&R’s offer, the deal will be cleared.
That will be a relief to CD&R as Morrisons has had to continue operating as a separate business while the CMA conducts its investigations.
($1 = 0.7982 pounds)
(Reporting by James Davey Editing by Kate Holton and Mark Potter)
Private equity refers to investment funds that buy and restructure companies that are not publicly traded. These funds typically aim to improve the company's performance and eventually sell it for a profit.
Petrol stations are retail establishments that sell fuel and other automotive products. They often include convenience stores and services for motorists.
A merger is a business transaction where two companies combine to form one entity. Mergers are often pursued to increase market share, reduce competition, or achieve synergies.
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