Morrisons has agreed to sell its petrol forecourts to Motor Fuel Group (MFG) as part of a £2.5bn deal that will also help drive the provision of electric vehicle charging.

The supermarket chain and MFG – both majority-owned by US private equity firm Clayton Dubilier & Rice (CD&R) – confirmed the agreement months after Sky reported on the infancy of the talks.

The deal will see Morrisons’ 337 fuel forecourts acquired by MFG, along with 400 other sites nationwide for the development of ultra-rapid electric vehicle charging.

Morrisons also takes a 20% stake in MFG under the proposals, which will allow the formation of a strategic partnership.

Morrisons has said the transaction would not result in any compulsory redundancies.

A statement also committed to supermarket-style fuel pricing, which is typically market-leading, amid sharp criticism of the industry from the competition regulator last year.

The sector was found to have overcharged customers in 2022, prompting the creation of a price transparency mechanism.

“Value-for-money supermarket fuel will remain the offering on Morrisons forecourts, with the Morrisons brand above the door,” the company said.

“Morrisons will continue to supply food and groceries across the 337 Morrisons petrol forecourts, with the opportunity to expand its supply into the MFG estate over the medium term through its fast-growing wholesale operation.

“MFG will invest and install ultra-rapid EV charging infrastructure across the sites acquired by MFG, significantly expanding MFG’s market leading nationwide EV network.

“MFG is targeting the installation of 800 ultra-rapid 150kW EV chargers, in hubs, within the first five years alone. These chargers can add 100 miles of range in approximately 10 minutes.”

The statement added: “The proposed transaction will create significant synergies across fuel retail and ancillary services, as well as scale advantages and growth opportunities for both businesses.”

It is similar to a deal announced last year that saw Asda acquiring EG Group’s petrol stations in the UK and Ireland.

Morrisons was expected to use a significant chunk of the proceeds of the deal to pay down part of its £5.7bn debt pile and allow wider investment in areas such as convenience shopping.

CD&R’s £7bn takeover of Morrisons in 2021 was scrutinised by competition regulators partly on the basis of the buyout firm’s existing ownership of MFG.

The Competition and Markets Authority ruled that the sale of 87 of MFG’s petrol forecourts would be sufficient to alleviate its concerns.

That deal has since been completed.

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Tom McAvoy – 2023’s Northern Ireland Retailer of the Year – has been in talks with Morrisons about a potential partnership, which would result in the launch of the supermarket’s first store in Northern Ireland.

Tom owns the award-winning 16,000 sq ft Nisaextra store in Rathfriland, and last year made history when his Milestone store won the coveted NI Retailer of the Year award for the fourth time.

While still contracted with Nisa, Tom has been bringing in Morrisons stock to his store for three to four years, using third parties including HMT Shipping and Magill Transport to get the ambient and frozen products to his County Down store. He told NR the food items have been well received by his customers.

“There is a good difference in price. The difference in price definitely pays for the paperwork and transport. It still leaves us with better margins and better offering,” said Tom, adding that he is keen to make the move to supplying their fresh food.

Widely recognised as a grocery innovator and one of the first to adapt new and exciting initiatives and developments in retail, Tom McAvoy’s store is widely looked upon as the standard for other retailers to aspire to, and has safely secured its spot as a destination store.

“Moving to Morrisons would certainly give us a unique position in NI retail,” said Tom.

“We looked at the market three to four years ago, independent retailers have very limited scope here. After speaking to [food retail guru] Scott Annan, he advised us to consider Morrisons.”

However, he stressed that while talks were ongoing and things are “moving in the right direction”, there were many outside elements to consider.

“We are pursuing it and we would like to get it across the line, but we are relying on EU-UK politics to develop.

“Personally, I think the UK is going to do something more like the Common Market, so if that happens the protocol will melt away and if that happens, the whole thing would definitely be a goer. If it doesn’t it’s still possible, but a lot of work.”

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In other Morrisons related news, but unrelated to this deal, MFG and Morrisons have confirmed the proposed acquisition by MFG of 337 Morrisons petrol forecourts (including fuel, convenience retail kiosk and ancillary services) and more than 400 associated sites across the UK for the development of ’ultra-rapid’ EV charging.

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City sources said the deals could together be valued at approximately £2.5bn, the bulk of which would be accounted for by Atalian Servest, Sky News reported.

Combining the two companies would create a global powerhouse in facilities management, an industry in which scale is critical to profitability.

One insider said that the takeovers were not certain to happen, but that CD&R was in detailed talks with both target companies, and that it was conceivable that it could reach an agreement with one or both within weeks.

Banks are said to have been approached about providing finance for the deals.

The private equity group has become one of the most prominent investors in British companies in recent years, and is now in the process of exploring a sale of Motor Fuel Group, the UK’s biggest independent petrol retailer.

It won a bidding war for Morrisons against Fortress Investment Group, and has previously owned well-known British businesses such as B&M, the discount retailer.

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