The new owner of Morrisons has offered to sell 87 petrol station forecourts in an effort to gain the competition watchdog’s approval for its £7bn takeover of the UK’s fourth largest supermarket.
The Competition and Markets Authority (CMA) said it was “minded to accept” the plan by Clayton, Dubilier & Rice, a US private equity firm that owns a string of petrol forecourts, but it would consult on it before making a final ruling.
A CMA inquiry found the takeover could lead to a loss of competition and potentially higher petrol prices for drivers in 121 areas.
CD&R owns the Motor Fuel Group, the largest independent operator of petrol stations in the UK with 921 sites, while Morrisons operates 339 across England, Scotland and Wales.
While the number of petrol stations CD&R is proposing to sell – all of which are Motor Fuel Group sites – is lower than the number of areas where concerns were identified, the CMA said the sale of some forecourts would affected multiple areas.
Colin Raftery, the senior director of mergers at the watchdog, said: “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. If we conclude that the competition issues have been addressed following a consultation on CD&R’s offer, the deal will be cleared.”
An agreement would stave off the a full investigation by the CMA that could take more than six months to complete, holding up CD&R’s plans for Morrisons.
The private equity firm has said putting Morrisons stores on to Motor Fuel Group forecourts could be an important way to expand the reach of the Bradford-based supermarket.
A lengthy investigation would be problematic for Morrisons, which has already warned that profits are likely to take a significant hit this year as the cost of living crisis and disruption because of the war in Ukraine weigh on the grocery market.
Morrisons has been losing market share in recent months as inflation across the grocery market has spurred shoppers to turn to discounters such as Aldi and Lidl, while Morrisons’ bigger rivals Sainsbury’s and Tesco have been ploughing millions of pounds into keeping prices down for shoppers.
The buyout of Morrisons, which employs about 120,000 staff in the UK across 497 supermarkets as well as factories, farms and a company-owned fishing trawler, will bring the chain into private hands for the first time since the founding family listed it on the stock market in 1967.
