UK watchdog calls on Morrisons owner to fix fuel competition issues
LONDON, March 24 (Reuters) – US private equity firm Clayton, Dubilier & Rice (CD&R) must address competition regulator concerns that its purchase of supermarket chain Morrisons could lead to higher fuel prices to avoid a full investigation into the agreement.
CD&R owns the Motor Fuel Group (MFG), which is the UK’s largest independent service station operator, with 921 service stations compared to Morrisons’ 339.
The Competition and Markets Authority (CMA) said on Thursday its Phase 1 investigation found the deal raised competition concerns in 121 areas of the UK where MFG and Morrisons had service stations.
“We are concerned that this agreement will result in higher prices for motorists in some parts of the country,” said Colin Raftery, senior director of mergers at AMC.
“But if CD&R and Morrisons are able to address these concerns, we won’t need to move into a full merger investigation.”
The AMC gave the CD&R five working days to make proposals to address the concerns identified. These proposals are likely to be forecourt transfers.
The regulator then has an additional five working days to consider whether to accept them in principle rather than refer the case for a Phase 2 investigation.
CD&R completed its £7 billion ($9.2 billion) purchase of Morrisons last October, but the supermarket chain has had to continue operating as a separate business while the CMA conducts its investigations.
($1 = 0.7593 pounds)
(Reporting by James Davey Editing by Paul Sandle and David Goodman)
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