Morrisons completes £2.5bn petrol forecourts MFG sale

Bradford-based supermarket giant Morrisons said it successfully closed the sale to Motor Fuel Group (MFG) of 337 Morrisons’ petrol forecourts and more than 400 associated sites for electric vehicle charging development for £2.5 billion “in the form of cash and equity instruments.”

US private equity firm Clayton, Dubilier & Rice (CD&R) completed a £7 billion takeover of Morrisons in 2022.

“The transaction forms a new strategic partnership between the two companies,” said Morrisons.

“As part of the transaction, Morrisons has taken a minority stake of approximately 20% equity interest in MFG and entered into commercial and supply agreements with MFG, underscoring the long-term nature of the partnership.

“The transaction further underpins Morrisons’ convenience growth strategy.”

Morrisons said it intends to use the cash proceeds of £1.8 billion — after fees and expenses related to the transaction — to “strengthen its capital structure and repay certain of its debt obligations.”

Morrisons added: “Whilst the company may elect to apply up to £1bn proceeds towards reinvestment, it intends to explore if there are efficient opportunities to apply proceeds to debt reduction, which may include bilateral discussions with debt holders, tender offers, open market purchases or redemptions of its debt instruments across the entire capital structure.

“The company intends to use part of the proceeds to repay the Facility A loan under its senior facilities agreement in its entirety without delay.”

HSBC Bank plc and Rabobank acted as financial advisors to Morrisons in connection with the transaction. Kirkland & Ellis and Eversheds acted as legal advisors and Deloitte acted as accounting advisors.