Sir Dave played down the possibility of any interference in Mr Morrison's affairs. day-to-day activities in a new position at CD&R. Photo: REUTERS/Peter Nicholls/File Photo
Former Tesco chief executive Sir Dave Lewis has joined private owner Morrisons as the supermarket giant battles to regain market share.
Clayton, Dubilier & Rice (CD&R) hired Sir Dave to strengthen its consumer and retail offering just three years after it bought Morrisons for £10 billion.
The retail veteran is widely credited with turning around Tesco during his tenure as chief executive from 2014 to 2020.
His move to CD&R comes as the buyout specialist tries to turn around Morrisons' fortunes after it lost fourth place to Aldi last year UK's largest supermarket.
CD&R Co-President Dave Novak said, “I believe his knowledge and experience, accumulated over three decades, will be of great value to CD&R funds as we believe new investments and continue to build stronger and more resilient businesses across Europe.”
CD&R, founded in 1978, is one of the world's oldest private equity funds and invests in six core sectors, including consumer and retail trade.
The New York firm bought Morrisons for £10 billion in debt. triggered a takeover in 2021.
The Bradford-based grocer has since fallen behind rivals as the cost of living crisis saw shoppers switch to discounters Aldi and Lidl.
Sir Dave , who previously spent 28 years at consumer goods giant Unilever, sought to play down the likelihood of him interfering with Morrisons' day-to-day operations.
“If I have a mandate it is to look at what investments can be added to the portfolio, but these two investments already have a fantastic team working on them,” he told the Financial Times: Old, 58, who is at Unilever nicknamed “Acerbic Dave” due to his drastic cost-cutting program, he was tasked with returning Tesco to profitability.
Under his leadership, Tesco embarked on sweeping cost cuts as part of an economic recovery effort that saw the loss of thousands of jobs.
He also oversaw Tesco's sale of its stores in Korea and Thailand and led Tesco's acquisition of a major wholesaler UK trader Booker for £3.7 billion in 2017.
Sir Dave is the latest addition to CD&R's team of corporate advisors. , which includes Sir Terry Leahy, chief executive of Tesco from 1997 to 2011.
Bernstein retail analyst Bruno Montagne believes CD&R will benefit from Sir Dave's dual experience in the retail and consumer sectors.
He said: “Having worked with both brand manufacturers and retailers, he has truly seen both sides supply chain, giving him a clearer view of the industry than anyone else.
“There's a lot of activity in the company. brand manufacturers themselves and the active participation of private capital in brand development. The most important thing will be to look for new deals. You need experienced people who understand brands.”
Sir Terry Leahy, another former Tesco CEO, is also on CD&R's list of consultants. Photo: Andrew Crowley
Lewis' post-Tesco career has largely focused on consumer and healthcare brands, holding board positions at PepsiCo and Haleon, GSK's consumer healthcare subsidiary.
Shore Capital analyst Clive Black said Lewis' consumer experience was CD&R's most attractive asset.
He said: “CD&R's primary interest in Dave is in the consumer products space. I suspect this is the main motive rather than a fix for Morrison.
“He has made fantastic improvements at Tesco, but he is not a turnaround trader. He is an all-rounder in terms of just being a world-class leader.”
CD&R has enough capital to invest in consumer brands and last year closed a $26bn (£20bn) fund to invest in new companies.
At the same time, private equity firms have been growing interest in consumer goods brands.
In 2021, CVC Capital acquired Unilever's Ekaterra tea business, which includes PG Tips and Lipton, for €4.5 billion.
CD&R was the first private equity firm to pioneer the new style of leveraged buyouts early on. 1990s, pairing dealmakers with industry veterans to acquire valuable assets.
As part of this strategy, dozens of U.S. executives joined the firm, including former General Electric CEO Jack Welch and, more recently, former Boeing chief Jim McNerney.< /p>
In the UK, CD&R now employs such luminaries as former BAE Systems chairman Sir Dick Olver and former Heathrow airport chief Sir Nigel Rudd. The European unit is headed by Roberto Quarta, chairman of WPP.
One private equity executive said hiring former star figures such as Sir Dave often helped firms secure deals during bidding wars.
< p >They said, “They help you close a deal and encourage a specific management team to choose you from among two dozen private equity firms.”
“They may view you as a better opportunity because they, too, have connections.” .
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