(Sharecast News) - Morrisons' takeover by a private equity firm could lead to higher petrol prices in more than 100 places because of overlap between the two groups' petrol stations, the UK competition watchdog said.
The Competition and Markets Authority said Clayton, Dubilier & Rice operates 921 petrol stations across the UK under brands such as Esso and BP.
CD&R, which agreed to buy Morrisons in 2021, is the biggest independent operator of petrol stations in the UK. Morrisons operates 339 petrol stations, most of which are next to its supermarkets.
The CMA said CD&R's £7.1bn takeover of Morrisons both have petrol forecourts in 121 local areas where they face limited competition. This could lead to higher petrol prices for motorists with prices near record highs because of the war in Ukraine, the CMA said.
The watchdog made the findings in a preliminary phase 1 investigation into the takeover. It gave CD&R five days to come up with proposals to address its concerns and said if this did not happen it would start a lengthy phase 2 probe.
Colin Raftery, senior director of mergers at the CMA, said: "Prices for petrol and diesel have recently hit record highs, which makes it even more important that we don't allow a lack of competition at the pump to make the situation worse.
"We're concerned that this deal could lead to higher prices for motorists in some parts of the country. But if CD&R and Morrisons are able to address these concerns, then we won't need to move on to an in-depth investigation of the merger."