Morrisons completes sale of forecourts to MFG

The deal, taking in 337 Morrisons’ petrol forecourts and approximately 400 associated sites on Morrisons’ car parks, has a price tag of £2.5bn in cash and equity instruments.

The completion of the deal initiates a “new strategic partnership” between Morrisons and MFG. 

Morrisons has taken a 20% stake in MFG and struck commercial and supply agreements. The grocer said the deal underpins its convenience growth strategy.

Both companies are owned by private equity group CD&R. Morrisons is carrying a high level of debt following its acquisition three years ago and willl use the cash proceeds from the forecourts sale – amounting to £1.8bn after fees and expenses –  to “strengthen its capital structure and repay certain of its debt obligations”.

The retailer said: “While 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.” A ‘Facility A’ loan under Morrisons’ senior facilities agreement will be repaid “in its entirety without delay”.

Morrisons, which had been underperforming its rivals, last month reported its strongest quarterly like-for-like sales in three years under new chief executive Rami Baitiéh’s programme to “reinvigorate, refresh and strengthen” the business.