£2.5bn deal completed to sell Morrisons petrol forecourts to MFG

Bradford-headquartered supermarket chain, Morrisons, says it has successfully closed a £2.5bn sale to Motor Fuel Group (MFG), together with certain affiliates.

Included in the sale are 337 Morrisons’ petrol forecourts (including fuel, convenience retail kiosk and ancillary services) and more than 400 associated sites on Morrisons’ car parks across the UK for ultra-rapid electric vehicle charging development.

The deal is designed to form a new strategic partnership between the two companies.

Both Morrisons and MFG are majority-owned by Clayton Dubilier & Rice (CD&R), an American private equity firm.

As part of the transaction, Morrisons has taken a minority stake of approximately 20% equity interest in MFG and entered into commercial and supply agreements with MFG. The transaction is also meant to further underpin Morrisons’ convenience growth strategy.

A spokesman for the supermarket explained: “Morrisons intends to use the cash proceeds of £1.8bn (after fees and expenses related to the transaction) to strengthen its capital structure and repay certain of its debt obligations.

“Whilst the company may elect to apply up to £1bn proceeds towards reinvestment, it intends to explore if there are efficient opportunities to apply proceeds to debt reduction, which may include bilateral discussions with debt holders, tender offers, open market purchases or redemptions of its debt instruments across the entire capital structure.

“The company intends to use part of the proceeds to repay the Facility A loan under its senior facilities agreement in its entirety without delay.”

HSBC Bank plc and Rabobank acted as financial advisors to Morrisons in connection with the deal.

Kirkland & Ellis and Eversheds acted as legal advisors and Deloitte acted as accounting advisors to Morrisons.  

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