CMA to examine £7bn takeover of Morrisons owing to petrol stations

The UK’s competition watchdog is to examine the £7bn takeover of Morrisons by a US private equity firm that owns a string of petrol forecourts.

The Competition and Markets Authority said Clayton, Dubilier & Rice, which completed its takeover of the supermarket chain last week, should ensure that Morrisons’ operations remained separate from the finance firm’s Motor Fuel Group until the potential effect on consumers from a tie-up had been considered.

The watchdog has up to four months to decide whether to launch a full inquiry into whether consumers can be harmed by CD&R taking control of more than 1,200 of the UK’s 8,000 petrol stations.

A full investigation could take more than six months to complete.

Motor Fuel Group, which CD&R acquired in 2015, owns more than 900 forecourts while Morrisons operates 335.

Morrisons declined to comment on the CMA’s move.

The watchdog has the power to order CD&R to offload petrol stations if it deems consumers will be disadvantaged by a merger.

The private equity firm has said that putting Morrisons stores on to Motor Fuel Group forecourts could be a key way to expand the reach of the Bradford-based supermarket.

Its buy-out 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.

The deal also unites the former Tesco boss Sir Terry Leahy with his former Tesco lieutenants David Potts, who has been chief executive of Morrisons for more than six years, and Trevor Strain, the chief operating officer who joined Morrisons in 2009.

CD&R said: “As expected, the CMA has issued an Initial Enforcement Order and CD&R looks forward to working constructively with the CMA to address any questions they may have.”