Morrisons’ takeover by US private equity giant Clayton, Dubilier & Rice (CD&R) will face further scrutiny by the competition watchdog amid fears over petrol prices. 

Morrisons fuel queues, September 2021

Morrisons currently has around 335 petrol stations

The Competition and Markets Authority (CMA) has launched a phase-one inquiry into the £7bn deal, which CD&R sealed last October following a bidding war with rival suitor Fortress.

The CMA said it was investigating whether the acquisition “has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom”.

It is understood the probe will focus on Morrisons’ petrol forecourt business. CD&R already owns Motor Fuel Limited, which operates 900 filling stations across the UK. Morrisons, by comparison, has a portfolio of 335 petrol stations. 

Prior to the developments, the CMA had slapped an enforcement order on CD&R that prevented it from combining its business with Morrisons until the regulator was satisfied that competition would not be compromised by the deal.

The CMA could opt to launch an even more detailed phase-two investigation – a decision that would have to be made by March 24. Should the CMA find cause for concern, it could order CD&R to offload some of its petrol forecourt sites. 

The authority reached a similar verdict last year following its investigation into Asda’s acquisition by petrol forecourt tycoons Mohsin and Zuber Issa.

The brothers were ordered to offload 27 petrol stations in geographies where the combination of their EG Group and Asda would have weakened competition and given the enlarged group power to inflate prices.

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