Bradford-based supermarket giant Morrisons said on Tuesday it has agreed a £2.5 billion deal to sell 337 petrol forecourts to Motor Fuel Group (MFG).
Both Morrisons and MFG are owned by US private equity firm Clayton, Dubilier & Rice (CD&R).
The two companies will also form a strategic partnership, with Morrisons taking a stake of about 20% in MFG.
Clayton, Dubilier & Rice completed a £7 billion takeover of Morrisons in 2022.
The deal will also see MFG acquire more than 400 associated sites across the UK for Ultra-Rapid electric vehicle (EV) charging development.
“The proposed transaction will create synergies across fuel, retail and ancillary services, scale advantages and growth opportunities across the new entity,” said Morrisons.
“It will benefit UK motorists and shoppers at the pump and in store, as well as helping the UK prepare for the end of new diesel and petrol car sales in 2035, as the UK Government strives to meet its 2050 net zero target.
“The transaction further underpins Morrisons’ convenience growth strategy.”
Morrisons said it will continue to supply food and groceries across the 337 petrol forecourts with the opportunity to expand its supply across the MFG estate over the medium term through its wholesale operation.
Morrisons CEO Rami Baitiéh said: “As the needs of the customer continue to evolve, Morrisons and MFG’s partnership will see us combine our respective expertise and resources to deliver the best value for customers at the pump, in our convenience stores and in our supermarkets.
“It means Morrisons customers will continue to see a competitive and attractive forecourt offering, including expanded access to EV charging, while also benefitting from greater focus on investment in Morrisons’ core food business.
“We are delighted to have such a strong partner in MFG and look forward to the opportunities a combined MFG and Morrisons forecourt offering will provide.”
Morrisons has about 91,000 staff in approximately 500 supermarkets, and 1,250 convenience stores.
Morrisons said the strategic partnership between the two companies would create the largest independent petrol forecourt operator in the UK.
The deal will also help Morrisons reduce its debt.
“What’s driving this deal is industrial logic,” Morrisons chairman Terry Leahy told Bloomberg.
“I have long been associated with supermarkets and I know why they invested in fuel retailing, but the world has moved on since. To handle the transition to electric vehicle charging it’s best left in the hands of a specialist.”