Morrisons lines up £600m warehouses sale

Morrisons’ private equity owner, Clayton Dubilier and Rice (CD&R), is reportedly scouting for a buyer for its estate of warehouses, fisheries and food manufacturing hubs in a sale worth over £600m.

According to The Times, the American private equity company is mulling a sale-and-leaseback transaction in a bid to power returns from its £7bn takeover of Morrisons.

CD&R is thought to be anticipating a sale of some two dozen assets, with the British grocer owning nine distribution centres and 20 food manufacturing plants across the Midlands, the north and in Scotland.

Additionally, The Times said that sources confirmed the assets were being marketed by BNP Paribas and Knight Frank.

The news comes as CD&R was given the green light by The Competition and Markets Authority (CMA) last week (9 June) for its acquisition of Morrisons. The CMA had provisionally accepted CD&R’s offer to sell 87 petrol stations in order to address competition concerns.

The watchdog then confirmed it had accepted the undertakings given by the New York private equity titan in relation to its £7bn takeover.

At the time, David Potts, Morrisons’ CEO, 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.” 

Sir Terry Leahy, senior adviser to CD&R funds, added: “We are delighted to be supporting Morrisons on the next stage of their journey and to 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.”

Retail Sector has contacted Morrisons for comment.