CD&R’s $10 Bln Acquisition Of Morrisons To Be Probed By UK Watchdog

The British supermarket chain Morrisons has to be managed as a separate company while its 7 billion pounds ($9.7 billion) merger deal with Clayton, Dubilier & Rice’s (CD&R) is being reviewed by Britain’s competition regulator, according to the watchdog.

CD&R is acquiring Morrisons’. 

An Initial Enforcement Order (IEO) was issued on Friday by the Competition and Markets Authority (CMA) barring CD&R from merging Morrisons’ operations or transferring control of the firm until such time that the acquisition was cleared by the regulator. .

There were no comments on the issue available from Morrisons

According to the regulator CMA, its order does not prevent the two companies from completing the merger as long as CD&R and Morrisons followed the conditions and restrictions that it has imposed.

CD&R stated that it is looking forward to “constructively engaging with the CMA to answer any queries they may have.”

Before formally opening a probe into the acquisition, the CMA is currently collecting information and evidence. It will then have 40 days to determine whether to allow the deal through with or without remedies or to launch a more thorough probe.

When regulators examine takeovers, IEOs are frequently utilized by regulators to guarantee that any decision to stop a deal or require remedies in a deal is not hampered by the firms’ integration.

Facebook was fined $70 million last month for its acquisition of GIF provider Giphy, in a rare example of non-compliance.

CD&R and Softbank-owned Fortress Investment Group went head to head in an auction to acquire Morrisons and CD&R’s bid prevailed. The acquisition deal has been supported by the shareholders of the British supermarket chain.

The market however has been ripe with speculations recently that using the acquisition deal, its 918 Motor Fuel Group (MFG) fuel forecourts would be combined by CD&R with the 339 owned by Morrisons, which would result in the opening of Morrisons convenience stores on the sites.

This proposed acquisition is potentially of the highest-profile among a slew of such deals and acquisitions in which British companies have been targeted by United States based investment companies since British companies have been presenting relatively low valuations since Brexit happened.

(Adapted from DevdisCourse.com)



Categories: Economy & Finance, Entrepreneurship, Geopolitics, Regulations & Legal, Strategy, Uncategorized

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