Supermarkets

CD&R offers to sell petrol stations in bid to push through Morrisons deal

While Morrisons is predominantly a groceries retailer, it also operates 339 petrol stations, the vast majority of which are located at its supermarkets across the UK

CD&R has offered to sell a number of its petrol forecourts in order to push through its £7bn acquisition of Morrisons and receive approval from the Competition and Markets Authority (CMA).

It comes as CD&R is also the owner of the Motor Fuel Group (MFG), the largest independent operator of petrol stations in the United Kingdom. MFG operates 921 petrol stations across England, Scotland and Wales under a number of different brands, such as Esso, BP, Shell, Texaco, Jet and Murco.

While Morrisons is predominantly a groceries retailer, it also operates 339 petrol stations, the vast majority of which are located at its supermarkets across the UK.

Following its Phase 1 investigation into the merger, the CMA said it believes that the deal raises competition concerns in relation to the supply of petrol and diesel in 121 local areas across England, Scotland and Wales.

These are all areas in which MFG and Morrisons both have petrol forecourts and it said CD&R would face only “limited competition after the merger, meaning that the deal could lead to an increase in prices”.

However, the CMA has now revealed that CD&R has “offered undertakings” which involve divesting petrol filling stations. The CMA added it considers that there are “reasonable grounds for believing that the undertakings offered by CD&R, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002”.

An auction for the supermarket group was initially conducted on 2 October 2021, where CD&R Bidco bid 287p per Morrisons ordinary share, against a rival offer from Fortress, for 286p per share.

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