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Morrisons merger approved if 87 petrol stations sold

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Written by: Rebecca Goodman
03/05/2022
A merger between Morrisons and CD&R could go ahead if a number of petrol stations are sold first.

This deal, worth £7bn, has previously caused concern from the Competitions and Markets Authority (CMA) which suggested it “could lead to higher fuel prices for drivers in some parts of the country”.

CD&R is an American private equity firm and owner of the Motor Fuel Group (MFG) which is the largest independent operator of petrol stations in the UK.

It runs 921 petrol stations across England, Scotland and Wales under brands including Esso, BP, Shell, Texaco, Jet and Murco.

The merger would see it and Morrisons join forces, along with the supermarket’s 339 petrol stations.

As part of the CMA’s initial investigation into the merger, it raised competition concerns over the sale of petrol and diesel in 121 areas across England, Scotland and Wales.

These 121 areas were highlighted as both MFG and Morrisons run fuel forecourts so would face “limited competition” after the merger, “meaning the deal could lead to an increase in prices” at a time when fuel costs have reached a record high.

CD&R proposes selling some petrol stations

To appease the CMA and address competition and pricing concerns, CD&R has proposed to sell 87 of its petrol stations.

The CMA said this move would restore the loss of competition in the areas affected and it is “minded to accept the proposals”.

This is despite the number of petrol stations being sold being lower than the 121 areas it highlighted as a concern.

It will now consult on the proposals, and if accepted, the deal will be able 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.”

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