Morrisons' £7B private equity buyout — debt rose from £3.2B to £8.6B, 8,800 jobs cut

Morrisons was a stable UK supermarket chain when US private equity firm Clayton, Dubilier & Rice (CD&R) acquired it in October 2021 for £7 billion. The deal was funded largely through debt, with the company's net debt rising from £3.2 billion before the takeover to £8.6 billion at the parent company level. The acquisition was the largest UK retail buyout in years, and the new debt load immediately changed the economics of the business.

The debt burden quickly became unsustainable. In the 2022 financial year Morrisons reported a loss of £1.5 billion, followed by another loss of over £1 billion in 2023. Finance costs rose to £735 million as interest rates climbed. The company cut more than 8,800 jobs — almost 8% of the workforce — including 7,000 store staff, 780 in distribution, and 400 at head office. Revenue slipped from £18.7 billion to £18.4 billion as the company struggled to compete with discounters Aldi and Lidl.

To reduce the debt load, Morrisons sold 337 petrol forecourts to Motor Fuel Group (also owned by CD&R) for £2.5 billion in January 2024. The same firm that owned the supermarket also bought its assets — the sale reduced debt but transferred value between related entities rather than bringing in outside capital. The supermarket survived but was permanently weakened: a business that had operated for 124 years was turned into a vehicle for debt service.