Petrol stations sell off could clear path for Morrisons deal
An offer by the buyer of Bradford-headquartered supermarket chain, Morrisons, to sell 87 petrol stations, should provisionally enable final acceptance of the acquisition by the Competition and Markets Authority. (CMA)
In January, the CMA opened an investigation into Clayton, Dubilier & Rice Holdings’ (CD&R) £7bn purchase of Morrisons.
CD&R is the owner of the Motor Fuel Group (MFG), the largest independent operator of petrol stations in the United Kingdom, with 921 sites, while Morrisons, which is predominantly a groceries retailer, operates 339 petrol stations across England, Scotland and Wales.
The CMA’s phase one investigation focused on local areas where both businesses operated petrol stations.
The CMA concluded the deal raises competition concerns in relation to the supply of petrol and diesel road fuel in 121 local areas across England, Scotland and Wales – so could lead to higher prices for motorists in these locations.
In response, CD&R has now offered to sell 87 of MFG’s petrol stations to a purchaser or purchasers to be approved by the CMA.
The CMA says it is minded to accept these proposals, adding the offer, “appears to be suitable to restore the loss of competition brought about by the deal across each of the 121 local areas in which the concerns were identified.
“While the number of petrol stations CD&R is proposing to sell is lower than the number of areas in which concerns were identified, the sale of some petrol stations would address the concerns in multiple areas.”
The CMA is now consulting on the proposals for the sale of these petrol stations. If the CMA accepts the proposals, the deal would be cleared to proceed.
Colin Raftery, senior director of mergers, at the CMA, 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 the competition issues have been addressed following a consultation on CD&R’s offer, the deal will be cleared.”
