UK supermarket chain Morrisons agrees to $8.7b takeover
A Morrisons store is pictured in St Albans, Britain, September 10, 2020. /Reuters

A Morrisons store is pictured in St Albans, Britain, September 10, 2020. /Reuters

British supermarket giant Morrisons has accepted a takeover offer from a consortium of investment groups following its rejection of a private equity bid last month, the chain announced on Saturday.  

Under the 6.3-billion-pound ($8.7 billion) deal, the group of investors comprising Softbank-owned Fortress, Canada Pension Plan Investment Board and Koch Real Estate Investments will pay 252 pence per share plus a 2 pence special dividend.    

According to the announcement, the deal also includes 3.2 billion pounds in debt, which makes the total operation worth 9.5 billion pounds with debt recovery.   

The takeover of the supermarket chain based in northern England follows the rejection of a 5.5-billion-pound offer in June from Clayton Dubilier & Rice that sent the chain's share prices soaring – but which Morrisons ultimately said was too low.  

Richard Lim, CEO of consultancy Retail Economics, said the announcement "signals the biggest shake-up in the UK grocery sector for over a decade."   

"Success will hinge on the new owners gaining the support of experienced key members of the leadership team to execute on the future strategy," he added, emphasizing the impact of the shift towards online grocery shopping and the growth of rapid delivery on the market.  

These shifts in food shopping began before the pandemic with the online retail giant Amazon entering sector.  

Other conventional supermarkets in the UK, like the German outlet Lidl, have also been under pressure from the rapid changes in online buying.  

Investment in health equipment for employees, changes to stores on top of Brexit disruptions and other logistical obstacles in the pandemic have all affected established supermarkets, Lim explained. 

Source(s): AFP

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