American Investment Fund

The US investment fund “splashed” 10 billion USD to acquire the long-standing British supermarket chain

Private investment firm Clayton, Dubilier & Rice (CD&R) has won the Morrisons supermarket chain auction with a bid of £7 billion ($9.5 billion).

This tens of billion-dollar supermarket chain started as an egg and avocado business in 1899. Photo: AFP

The deal paved the way for CD&R to take control of the UK’s fourth-largest supermarket group.

The Takeover Panel, which organized the auction, said on Monday that CD&R had offered a price of 287 cents a share of Morrisons, while another large investor led The Fortress Corporation backed the bid for 286 cents.

CD&R’s victory marks the triumphant return of Terry Leahy, former CEO of Britain’s largest supermarket chain Tesco, to this exciting retail sector. Terry Leahy is currently a senior consultant at CD&R.

CD&R’s winning bid was only slightly above the 285 cents Morrisons Board of Directors recommended in August.

Morrisons . Board of Directors expected soon meeting and recommending shareholders to approve the bid price at the next shareholder meeting on October 19.

If the shareholders Morrisons If approved, CD&R can complete the takeover of this supermarket chain by the end of October. Morrisons is the second UK supermarket chain to be acquired with private capital since the beginning of the year, after the acquisition of the third largest supermarket chain Asda was completed. back in February.

Morrisons is headquartered in Bradford, northern England. Starting as an egg and butter business in 1899, it went public in 1967 and has grown into the fourth largest supermarket chain in the UK, after Tesco, Sainsbury’s, and Asda.

The race to acquire Morrisons began in May. This is a very attractive deal this year when attracting the attention of wide range of investment companies. It reflects the huge private sector investment need for this money-making business in the UK.

CD&R has committed to retain Morrisons headquarters in Bradford and the current management team led by Morrisons CEO David Potts. At the same time, the US investment fund has also continued to implement Morrisons’ current strategy, not selling freely owned properties such as retail stores, and maintaining salaries for employees. However, these commitments are not legally binding.

Mr. Terry Leahy, who served as Tesco CEO for 14 years as of 2011, will be “reunited” with Morrisons CEO David Potts, and Chairman Andrew Higginson. These are also two of Terry Leahy’s closest “characters” at Tesco.

David Potts joined Tesco as a store clerk at the age of 16. The CEO would make more than £10 million if he sold his Morrisons stake to CD&R, while Chief Operating Officer (COO) Trevor Strain would pocket around £4 million doing the same.

Meanwhile, the Fortress Corporation has to mourn the cost of failure in the Morrisons . acquisition. Documents released in July show Fortress is expected to incur fees, banking and consulting costs of up to £263.5 million.

However, Fortress still asserted in a recent statement that: “The UK remains a very attractive investment environment from many perspectives, and we will continue to explore opportunities to help management teams grow their businesses and create lasting value.” long”.

After Asda and Morrisons, the second largest supermarket chain in the UK, Sainsbury’s, has been targeted by private equity funds and has been identified as a viable target.