Clayton Dubilier & Rice (CD&R), the private equity firm that has agreed to takeover Morrisons for £7bn has reached a deal with the supermarket’s pension trustees.
Amid intense competition between CD&R and rival Fortress, the private equity company confirmed it has agreed a comprehensive package of measures to support the UK supermarket’s pension schemes, on the way to completing the buyout.
The Times reported that CD&R’s commitment to the schemes means that it would be among “the best funded and best supported in the UK”.
Pension funds responsible for the retirement benefits of 85,000 current and former Morrisons employees have recently warned that they would look for mitigating concessions from both prospective bidders.
Trustees for its two main pension funds said debt-financed bids would “worsen” the financial strength of Morrisons and therefore its ability to meet its pension promises.
After talks took place between CD&R and Morrisons’ pension trustees, a concession for “an appropriate release mechanism to allow for a gradual release of that security” has been made.
Morrisons consists of just under 500 stores and over 110,000 employees across the UK.
Morrisons first existed as a market stall in Bradford in 1899 owned by William Morrison. His son then took over the company and opened the first supermarket in the 1960s.
The Morrisons share price is up by 0.41% on Tuesday to 297.2p.