Morrisons will pass into foreign ownership for the first time as £7billion deal with American firm gets approval
- 497 Morrisons UK stores to be sold to New York-based Clayton, Dubilier & Rice
- The supermarket giant to pass into foreign ownership for first time in 122 years
- Morrisons £7billion takeover deal passed with a huge majority of 99.2 per cent
Morrisons will pass into foreign ownership for the first time in its 122-year history after shareholders yesterday overwhelmingly backed a £7billion takeover by a US private equity firm.
Its 497 UK stores will now be sold to New York-based Clayton, Dubilier & Rice following a four-month bidding war.
The deal – passed by a majority of 99.2 per cent – prompted outrage from MPs and senior City figures, who warned the brand could be ‘scrapped for parts’, hurting suppliers, customers and its 111,000-strong UK workforce.
Morrisons will pass into foreign ownership for the first time in its 122-year history after shareholders yesterday overwhelmingly backed a £7billion takeover by a US private equity firm
But the new owners last night insisted they would be ‘mindful of the heritage, culture and operating model’ of the supermarket chain.
Morrisons’ chief executive David Potts will now cash-in £8.7million of shares, rising to £22million if the board honours long-term bonuses.
The debt-fuelled sale will raise the company’s costs, making it more vulnerable if performance dips or interest rates rise.
Sir Terry Leahy, former Tesco chief executive, is tipped to become chairman of Morrisons after the takeover was approved.
He said: ‘The particular heritage, culture and operating model of Morrisons are key features of the company and we will be very mindful of these during our tenure as owners.
‘We very much look forward to working with the Morrisons team, not just to preserve the company’s many strengths – but to build on these, with innovation, capital and new technology – helping the business realise its full potential and delivering for all of its stakeholders.’
Morrisons’ chief executive David Potts will now cash-in £8.7million of shares, rising to £22million if the board honours long-term bonuses
Morrisons chairman Andrew Higginson added: ‘We remain confident that CD&R will be a responsible, thoughtful and careful owner of Morrisons.’
Morrisons is the second supermarket to be bought by private equity in 12 months, after Asda was sold to the Issa brothers and TDR Capital last year.
There are now just two listed supermarkets remaining – Sainsbury’s and Tesco – with both believed to be potential private equity targets in future.
Leahy stood down as chief executive of Tesco in 2011, having become one of Britain’s most respected business leaders.
The supermarket supremo grew up on a Liverpool council estate as the third of four brothers, and attended his local grammar school.
He was the only one of his siblings to stay at school past the age of 16.
He started at Tesco in the marketing team in 1979 after graduating from the University of Manchester Institute of Science and Technology in management sciences.
He was a key player in the development of the supermarket’s Clubcard.
At 40 he became chief executive and increased the company’s market share from a fifth to 30pc, developing a reputation as a tough and blunt operator.
He expanded into a dozen markets, including in Eastern Europe and Asia, and bought up convenience locations which became Tesco Express stores. In 2010 it made a profit of £3.4bn.
But he also came under fire for aggressive pricing tactics that harmed consumers, leading the Government to create an ombudsman to monitor supermarket behaviour.