In January, the Competition and Markets Authority (CMA) opened
its investigation into Clayton, Dubilier & Rice Holdings
LLC’s (CD&R) £7bn purchase of Wm Morrisons Supermarkets Ltd.
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 1 investigation focused on
local areas where both businesses operated petrol stations.
Following its Phase 1 investigation, the CMA found that 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 order to address these concerns, CD&R has now offered to
divest 87 of MFG’s petrol stations to a purchaser or purchasers
to be approved by the CMA.
The CMA is minded to accept these proposals, which appear 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 – known as
undertakings – 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 that the competition issues have been addressed
following a consultation on CD&R’s offer, the deal will be
cleared.
For more information, visit the CD&R / Morrisons merger
inquiry page.
Notes to Editors
- The CMA is publishing a notice of consultation and the text
of the Proposed Undertakings, alongside the text of the Phase 1
decision of 24 March 2022 and the decision of 7 April 2022 that
the CMA is considering undertakings offered by CD&R. The
CMA’s consultation is scheduled to run until 17 May 2022.
- On 24 March 2022, following a Phase 1 review, the CMA has
found that CD&R’s acquisition of Morrisons gives rise to a
realistic prospect of substantial lessening of competition (SLC)
in relation to the retail supply of road fuel in 121 local areas
across England, Scotland and Wales.
- The CMA served an initial enforcement order on 26 October
2021 requiring the companies to operate independently, as they
did before the purchase, and the order remains in force. Details
of the order can be found on the CD&R / Morrisons merger
inquiry page.
