The UK’s Competition and Markets Authority (CMA) has told US private equity firm Clayton, Dubilier & Rice (CD&R) it must address CMA concerns that its £7.1 billion purchase of Bradford-based supermarket giant Morrisons could lead to higher fuel prices to avoid an in-depth investigation of the deal.

CD&R is the owner of the Motor Fuel Group (MFG), the largest independent operator of petrol stations in the United Kingdom with 921 fuel stations, while Morrisons operates 339 petrol stations.

CMA senior director of mergers Colin Raftery said: “Prices for petrol and diesel have recently hit record highs, which makes it even more important that we don’t allow a lack of competition at the pump to make the situation worse.

“We’re concerned that this deal could lead to higher prices for motorists in some parts of the country.

“But if CD&R and Morrisons are able to address these concerns, then we won’t need to move on to an in-depth investigation of the merger.”

The CMA said CD&R has five working days to offer proposals to the CMA to address the competition concerns identified.

The CMA would then have a further five working days to consider whether to accept these in principle instead of referring the case to a Phase 2 investigation.

“CMA finds CD&R’s acquisition of Morrisons could lead to higher fuel prices in 121 locations across the country where both firms own forecourts … ” said the CMA.

“In January, the Competition and Markets Authority (CMA) opened its investigation into Clayton, Dubilier & Rice Holdings LLC’s (CD&R) £7.1 billion purchase of Wm Morrisons Supermarkets Ltd (Morrisons).

“CD&R is the owner of the Motor Fuel Group (MFG), the largest independent operator of petrol stations in the United Kingdom.

“MFG operates 921 petrol stations across England, Scotland and Wales under a number of different brands, such as Esso, BP, Shell, Texaco, Jet and Murco.

“While Morrisons is predominantly a groceries retailer, it operates 339 petrol stations, the vast majority of which are located at its supermarkets across the UK.

“Following its Phase 1 investigation into the merger, the CMA has found that the deal raises competition concerns in relation to the supply of petrol and diesel in 121 local areas across England, Scotland and Wales.

“These are all areas in which MFG and Morrisons both have petrol forecourts and would face only limited competition after the merger, meaning that the deal could lead to an increase in prices.”