Clayton, Dubilier & Rice has won an auction to buy Morrisons in a deal that values the UK supermarket group at £7.1 billion (about $9.7 billion), beating a rival bid from a consortium led by Fortress Investment Group. 

The special auction process, held on Saturday and overseen by the UK's Takeover Panel, ends a four-month bidding war for the UK's fourth-biggest supermarket by market share.  

CD&R's final bid of 287 pence per share represents a roughly 61% premium on Morrison's closing price before the offer period began and a nearly 25% mark-up from CD&R's original offer of 230 pence per share. 

The controversial acquisition also attracted early interest from Morrison's strategic partners Amazon, and Apollo Global Management. It is emblematic of a recent trend for US private equity firms to target UK public companies that remain undervalued as they struggle with the dual impacts of Brexit and the pandemic. 

Morrison's is no exception. While the supermarket's share price has fluctuated over the course of the past two years, its half-year results revealed a 43% slump in profits as a nationwide shortage of truck drivers has impacted supply chains across the industry.

While CD&R is acquiring a company with a number of headwinds, this isn't the firm's first foray into UK retail. The firm previously acquired UK variety store chain B&M in 2013 and took it public in the following year, before exiting the business in 2018 after expanding its footprint by 300 stores. 

"CD&R have good retail experience, a strong record of developing and growing the businesses in which they invest, and they share our vision and ambition for Morrisons," said Andrew Higginson, chair of Morrisons, in a statement.    

Featured image by George Wood/Getty Images

Related content