The Competition and Markets Authority (CMA) launched the first phase of its probe into the takeover of Morrisons by a US private equity giant today.
The £7bn deal, which was completed in October, saw Clayton, Dubilier & Rice Holdings (CD&R) remove Morrisons from the London Stock Exchange.
The move prompted the CMA to order the companies to not merge their businesses – which has bought the watchdog some time for an investigation.
The probe will look into 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”.
Officials are reportedly concerned that the combing of Morrisons’ forecourts with CD&R-owned Motor Fuel Limited’s own petrol stations could harm competition in the UK.
If successfully combined, both companies would own more than 1,200 of the around 8,000 forecourts in the country.
While the CMA could block the merger completely, it is said the watchdog will more likely order the duo to sell off some of their forecourts – similar to Asda’s takeover.
Asda and new owners the Issa brothers were told to sell 27 petrol stations to get the green light.