Competition watchdog deepens probe into takeover of Morrisons by US private equity giant

The competition watchdog has deepened its probe into the takeover of Morrisons by a US private equity giant.

The Competition and Markets Authority on Thursday launched a so-called phase one inquiry into the £7 billion deal, which was completed in October.

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

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Within days of Clayton, Dubilier & Rice Holdings (CD&R) taking Morrisons off the public stock exchange last year the CMA slapped the companies with an order to not combine their businesses.

The Competition and Markets Authority on Thursday launched a so-called phase one inquiry into the £7 billion deal, which was completed in October.

The order buys officials time while they look into whether the deal might break competition rules.

Officials are understood to be probing whether competition would drop by combining Morrisons’ forecourts with those of Motor Fuel Limited, which was already owned by CD&R.

Motor Fuel has around 900 filling stations across the UK, it was bought by CD&R in 2015.

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Meanwhile Morrisons owned around 335 sites.

Together these companies would therefore control over 1,200 of the approximately 8,000 forecourts in the UK.

Ultimately the CMA could decide to block the merger, but it is much more likely to require some small concessions from the companies.

When Asda was taken over by filling station owners the Issa brothers, it was told to sell 27 petrol stations in places where its expanded footprint might give it too much power to dictate prices locally.