Morrisons has accepted a £6.3bn takeover offer by US investment firm Fortress Investment Group, the owner of Majestic Wine.
Fortress’ investment approach is to acquire companies with strong management teams and empower them to deliver their long-term strategy. Fortress has experience investing in the retail and food space in the UK (including Majestic Wine) and a 19-year track record of successfully investing in the grocery industry and petrol forecourt stations in the US..
Fortress intends for Morrisons to continue to operate as a standalone business, with its head office and head office functions remaining in Bradford, led by the Morrisons management team. Fortress is committed to being a good steward of Morrisons through the next stage of its evolution and will support Morrisons and its employees in executing management’s existing strategy, including: strong customer focus; vertically integrated supply chain; targeted new store openings and job creation; and focus on wholesale and online channels.
The new owner recognises that Morrisons’ relationship with its customers forms a central part in the fundamental character of the Morrisons business and that listening carefully to customers and improving and enhancing the shopping trip is a central priority for the Morrisons business.
Believing that Morrisons’ colleagues are its greatest asset and fundamental to the future success of the Morrisons business, Fortress confirms that, following the offer becoming effective, the existing employment rights, including existing pension rights of the management and employees of Morrisons, will be fully safeguarded. In particular, Fortress is fully supportive of Morrisons’ recent pay award of at least £10 an hour for all Morrisons colleagues in stores and manufacturing sites, which Fortress views as an important and appropriate recognition of their contribution to Morrisons. Fortress does not intend to make any change to the benefits provided by the Morrisons Pension Schemes.
The US firm fully supports the relationships that Morrisons has fostered with its small suppliers and farmers, particularly in response to the challenges of the COVID-19 pandemic, and does not anticipate any material changes to existing payment practices with them.
Fortress believes that sustainability is a key part of Morrisons’ long-term strategy and fully supports Morrisons’ existing social and environmental commitments to reduce its carbon footprint and use of plastic, to achieve zero deforestation in its supply chains for key risk commodities by 2025, to reduce food waste and to source its products in a sustainable way. Fortress fully supports Morrisons’ commitment, as one of British farming’s biggest direct supermarket customers, to a target of becoming the first supermarket to be completely supplied by net zero carbon British farms by 2030. Fortress is also committed to supporting Morrisons’ important role in ensuring the ongoing security of food supply in the UK.
Commenting on the Offer, Andrew Higginson, Chairman of Morrisons, said: “The Morrisons Directors believe that the Offer represents a fair and recommendable price for shareholders which recognises Morrisons’ future prospects.
“Morrisons is an outstanding business and our performance through the pandemic has further improved our standing and enabled us to enter the discussions with Fortress from a hard-won position of strength. We have looked very carefully at Fortress’ approach, their plans for the business and their overall suitability as an owner of a unique British food-maker and shopkeeper with over 110,000 colleagues and an important role in British food production and farming.
“It’s clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons. This, together with the very clear intentions they have set out today, has given the Morrisons Directors confidence that Fortress will support and accelerate our plans to develop and strengthen Morrisons further.
“Fortress, CPP Investments and KREI all have strong track records and a long-term approach to investing. They are backing our strategy, our management and our people. Morrisons has a rich history and a special culture and I am convinced that with the long term support of Fortress, the business will continue to prosper in the future.”
Joshua A. Pack, Managing Partner of Fortress, said: “We believe in making long-term investments focused on providing strong management teams with the necessary flexibility and support to execute their strategy in a sustainable and value enhancing manner. We fully recognise Morrisons’ rich history and the very important role Morrisons plays for colleagues, customers, members of the Morrisons Pension Schemes, local communities, partner suppliers and farmers. We are committed to being good stewards of Morrisons to best serve its stakeholder groups, and the wider British public, for the long term.”