A private equity firm’s takeover of Morrisons could lead to higher gas prices at more than 100 locations.
Britain’s competition regulator has warned that private equity firm Clayton, Dubilier & Rice’s (CD&R) acquisition of Morrisons for £7billion could lead to higher fuel prices at 121 sites across the Kingdom -United.
In January, the Competition and Markets Authority (CMA) launched an investigation into the takeover of the supermarket, but has now said it may pursue further investigation if those concerns are not resolved.
CD&R, which also owns petrol station giant Motor Fuel Group (MFG), won a long auction to buy the Bradford-based retailer in October.
CD&R is the largest independent service station operator in the UK.
MFG operates 921 service stations in England, Scotland and Wales under various brands, while Morrisons operates 339 service stations in its supermarkets.
The regulator said it now had concerns in areas where MFG and Morrisons both had forecourts and would face “limited competition” from other players after the merger.
He said “the deal could lead to higher prices” due to the lack of competition.
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The warning comes after a recent spike in petrol and diesel prices and a 5p reduction in fuel duty, as announced by the Chancellor this week.
Figures from data firm Experian Catalist show the average cost of a liter of petrol on UK forecourts on Tuesday was 167.3p, while diesel was 179.7p
Colin Raftery, senior director of mergers at CMA, said: “Gasoline and diesel prices have recently reached record highs, making it even more important that we don’t let a lack of competition at the pump worsen the situation.
“We are concerned that this agreement will lead to higher prices for motorists in certain regions of the country.
“But if CD&R and Morrisons are able to address these concerns, we won’t need to move into a full merger investigation.”
Supermarket rival Asda agreed to sell 27 petrol stations last year to help its £6.8billion takeover following concerns from the competition regulator.
The channel is owned by the owners of the E&G group, the Issa Brothers.