The UK competition regulator has warned of higher petrol and diesel prices in 121 sites across England, Scotland and Wales as a result of the £7.1bn takeover of Wm Morrison Supermarkets PLC.
Eight weeks after the Competition and Markets Authority (CMA) opened its investigation into the buyout by Clayton, Dubilier & Rice, it has judged the deal will lead to “limited competition” from other players when it is completed.
CD&R is the owner of the Motor Fuel Group (MFG), the largest independent operator of petrol stations in the UK, with 921 petrol stations across England, Scotland and Wales under a number of different brands, including Esso, BP, Shell, Texaco, Jet and Murco.
While predominantly a groceries retailer, Morrisons also operates 339 petrol stations, the vast majority of which are located at its supermarkets across the UK.
“Prices for petrol and diesel have recently hit record highs, which makes it even more important that we don’t allow a lack of competition at the pump to make the situation worse,” Colin Raftery, senior director of mergers at the CMA, said in a statement.
“We’re concerned that this deal could lead to higher prices for motorists in some parts of the country. But if CD&R and Morrisons are able to address these concerns, then we won’t need to move on to an in-depth investigation of the merger,” he added.
The watchdog has given CD&R five working days to propose how it intends to address the concerns, following which the CMA will determine if a Phase 2 investigation is required.
CD&R won a lengthy auction to buy the supermarket retailer in October.