Opposition Labour Party has called on the government to confirm it will intervene in any private equity takeover of supermarket group Morrisons to secure binding commitments about the buyer’s business plan, on jobs and on pensions.
Morrisons, Britain’s fourth largest grocer, said on Saturday it had rejected a proposed £5.52 billion cash offer from US private equity firm Clayton, Dubilier & Rice (CD&R).
Under British takeover rules, CD&R has until July 17 to announce a firm offer or walk away.
With a staff of 118,000, Morrisons is one of the UK’s biggest private sector employers and is unique among British supermarket groups in making over half of the fresh food it sells.
The British government has powers to intervene in takeovers of companies on grounds including competition, media plurality, national security and pandemic response.
However, Labour wants the government to have powers to intervene where an acquisition may have long-term implications for the UK’s industrial strategy.
“There are really worrying examples of companies including private equity firms loading businesses with debt, stripping them for parts and leaving with the rewards,” Seema Malhotra, Labour’s spokesperson on business, said.
“The government cannot just stand by and let that happen to Britain’s supermarkets, which are at the heart of our communities and provide an essential national service as we have seen during the pandemic.”
On Monday, a spokesperson for Prime Minister Boris Johnson declined to comment on the Morrisons bid.