British supermarket group Morrisons said it has agreed a 2.5 billion-pound ($3.2 billion) deal to sell 337 petrol forecourts to Motor Fuel Group (MFG) and will use the proceeds to invest in its grocery offer and strengthen its capital structure.
Both Morrisons, the UK's fifth largest supermarket, and MFG are owned by U.S. private equity group Clayton, Dubilier & Rice (CD&R).
The deal will also see MFG acquire more than 400 associated sites across the UK for Ultra-Rapid electric vehicle (EV) charging development, the two companies said on Tuesday.
They will form a strategic partnership, with Morrisons taking a stake of about 20% in MFG, and entering into commercial and supply agreements with it.
"The proposed transaction will create significant synergies across fuel retail and ancillary services, as well as scale advantages and growth opportunities for both businesses," the companies said, adding the deal would be a significant creator of jobs.
CD&R paid 7 billion pounds for Morrisons in 2021, leaving it with a hefty debt burden.
Morrisons, which is scheduled to report 2022/2023 results on Wednesday, has been losing UK grocery market share, ending 2023 with 8.8%, down 30 basis points on the year, according to researcher Kantar.
In October, Asda, Britain's third biggest supermarket group, completed the acquisition of the majority of petrol forecourt operator EG Group’s UK & Ireland business for an enterprise value of 2.1 billion pounds.
($1 = 0.7883 pounds)
