Labour says government should intervene in private equity takeover of Morrisons
Labour has called on the government to confirm it will intervene in any private equity takeover of Morrisons to secure binding commitments about the buyer’s business plan, on jobs and on pensions.
Morrisons revealed this weekend it had rejected a £5.5bn takeover bid from private equity firm Clayton, Dubiliter & Rice (CD&R), saying it believed accepting such an offer would have “significantly undervalued” the company.
CD&R has until July 17 to announce a firm intention to make an offer under UK takeover rules, or walk away.
With a staff of 118,000, Morrisons is one of the UK’s biggest private sector employers and is unique among British supermarket groups in making over half of the fresh food it sells.
The government has powers to intervene in takeovers of companies on grounds including competition, media plurality, national security and pandemic response.
However, Labour wants the government to have powers to intervene where an acquisition may have long-term implications for the UK’s industrial strategy.
“There are really worrying examples of companies including private equity firms loading businesses with debt, stripping them for parts and leaving with the rewards,” Labour MP Seema Malhotra said.
“The government cannot just stand by and let that happen to Britain’s supermarkets, which are at the heart of our communities and provide an essential national service as we have seen during the pandemic.”
In addition, the Business, Energy and Industrial Strategy Committee is reportedly preparing to write to the Competition and Markets Authority over the takeover of Morrisons.
The decision to intervene came after a group of Labour MPs said a private equity takeover of the UK’s fourth biggest supermarket would put thousands of jobs at risk
On Monday, a spokesperson for Boris Johnson declined to comment on the Morrisons bid.