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Retail

CMA Probes Morrisons £7 Billion Takeover Deal

Britain's competition regulator has opened an investigation into the £7 billion (€8.29 billion) purchase of UK supermarket chain Morrisons by US private equity group Clayton, Dubilier & Rice, the watchdog said on Friday.

The Competition and Markets Authority (CMA) said that Morrisons should continue to be run as an independent business for the time being with its own brand and management.

CD&R and Morrisons did not immediately respond to a request for comment on the order, which the CMA said does not prohibit the completion of the deal as long as CD&R and Morrisons observe the restrictions it has set out.

Rare Auction

The proposed deal, backed by Morrisons' shareholders, was settled after a rare auction that was held due to competing bids from CD&R and Softbank-owned Fortress Investment Group.

There has been speculation that through the deal CD&R could combine its 918 Motor Fuel Group (MFG) fuel forecourts with the 339 owned by Morrisons, opening Morrisons convenience stores on the sites.

The deal has been the highest profile among a series of transactions where US investment firms have targeted British ones due to relatively low valuations following Brexit.

In August, private equity group Clayton, Dubilier & Rice (CD&R) said the pension rights of the Morrisons management team and employees will be 'fully safeguarded' once its takeover offer for the British supermarket chain becomes effective.

Read More: CD&R Wins Morrisons Auction, But Could Sainsbury's Be Next Fortress Play?

News by Reuters, edited by ESM. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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