Why £7bn takeover of Morrisons could see the chain enter a glorious new era - Mark Casci

Notwithstanding a shock of biblical proportions, Morrisons will be officially sold to Clayton, Dubilier & Rice.

The fund’s £7bn offer will be voted on by Morrisons shareholders this afternoon, the final step before the sale is concluded.

It will see the 122-year-old chain owned by overseas investors for the first time in its history.

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What started as an egg and butter stall on Bradford’s Rawson’s Market is now the fourth largest retailer in Britain, with 11 million weekly customers, more than 100,000 employees and close to 500 stores nationwide.

Morrisons takeover will be voted on by shareholders on Tuesday.

Its turnaround under David Potts has been one of Britain’s great success stories in recent years and it was inevitable that at some stage serious overseas money would place the supermarket chain in its sights.

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Sir Ken Morrison is cited more than anybody in the region as Yorkshire’s finest businessman. His example lives on to inspire future generations and his legacy inhabits every aspect of what makes the business that his father William started in 1899 a success.

To see it taken over by a US private equity house which has invested more than $30bn in approximately 90 businesses will feel an unnatural fit for many who remember it as a company that set the high bar for what a family-run enterprise can achieve.

What would Sir Ken have made of the sale?

However, this is the world of business. Legacies and traditions will not generate capital to sustain job creation and innovation.

The fact that CD&R are set to take control underscores this. Morrisons is about to hit the big time.

And while it may be easy to lament the changing of the guard it is easy to overlook the colossal strength that Morrisons is now likely to possess going forward.

Firstly, CD&R has been at pains to state it has no plans, at least in the short run, to revolutionise the business.

Morrisons takeover set to be agreed.

It has pledged to keep staffing levels as they are, to sustain current wage levels and to retain the present management team.

It is also set to bring in former Tesco CEO Sir Terry Leahy as chair, a move that will see the supermarket mogul return to the industry’s big leagues.

It is a matter of public record that Sir Terry was a great admirer of Sir Ken and respected him enormously. The new Morrisons chair will be in no rush to target his legacy.

Morrisons is different to the nation’s other large multiples.

It has a genuinely integrated supply chain.

Rather than just having a chain of stores, it also owns farms, factories and distribution centres – something many of its competitors do not offer.

When the deal was first suggested, unions and some MPs – rightly – expressed concern that any potential suitors may seek to sell off the more valued assets that Morrisons owns.

However, given the current state of British commerce, Morrisons integrated supply chain puts them at a distinct competitive advantage, one any owner would wish to retain at all costs rather than seek a quick return.

Played correctly, the CD&R takeover could be one of the finest chapters in Morrisons’ history.

It is well-placed to move in to more convenience stores, to open more petrol forecourts and to expand upon its digital proposition.

A recent savvy deal with Deliveroo is proof that Morrisons is increasingly a 21st century business.

I know many will view the CD&R takeover with a degree of suspicion. Morrisons is a business that is held dearly in Yorkshire and provides employment for so many people.

But putting aside our innate Yorkshire cynicism, we should now look to the future and see what the new owners can do.

As I have argued the chain can grow in the areas of forecourts, convenience and online.

The next few years could mean we see a lot more of Morrisons in the marketplace.

Such a thing would be good for retail, good for the exchequer and good for Yorkshire.

It is hard not to think about what Sir Ken would have thought about such a prospect.