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US buyout firm Clayton, Dubilier & Rice has hired former Tesco boss Sir Dave Lewis as an operating adviser as it seeks to bolster its consumer and retail team so it can explore new investments.
CD&R said Lewis, who spent almost three decades at consumer goods group Unilever, will help source and execute deals as well as support its portfolio of companies across Europe.
He joins a team of other operating advisers including former Boeing chief executive Jim McNerney and former Marsh McLennan leader Dan Glaser as well as Sir Terry Leahy, who also ran Tesco from 1997 to 2011.
Leahy, who joined CD&R in 2011 and chairs its UK supermarket chain Wm Morrison, told the Financial Times: “We need to add to our team because there are lots more opportunities . . . and you don’t want to have bottlenecks on growth.”
Leahy said that in recent years CD&R had “never really been able to do a consumer deal”, adding: “They’ve all been retail deals and also we’ve never really done a leisure or consumer services deal.”
“CD&R is a high-performing business with really good people and the way they do business is important to me,” Lewis told the FT. He chairs consumer health group Haleon and was instrumental in reviving Tesco’s fortunes during his tenure after an accounting scandal in 2014.
Clive Black, a retail analyst at Shore Capital, said it was “a stunning appointment”, adding: “There’s no one who knows consumer products better than Lewis.”
CD&R invests across six core sectors, including consumer and retail. In 2021, the group bought Morrisons in a £10bn deal. It also owns assets including petrol station operator Motor Fuel Group and part of car windscreen repair company Belron.
CD&R has explored the possibility of selling MFG. Under its ownership, Morrisons’ sales have lagged behind many UK competitors.
Lewis said he did not have “any formal involvement” with Morrisons or MFG. “If I have a remit, it is to think what investments might be added to the portfolio, but there’s already a fantastic team working on those two investments.”
However, Black commented that it would be a “missed opportunity” if CD&R did not involve him in Morrisons because of his accomplishment of a “complete turnaround” at Tesco.
Dave Novak, CD&R co-president, told the FT: “We’re highly conscious that our offering across each one of [CD&R’s existing consumer and retail] businesses has to be what the consumer wants and available when the customer wants it at the [right] value.”
During his own tenure, CD&R had done “a number of successful deals”, Leahy said, including the IPO of UK value retailer B&M, which delivered a £1bn payday for CD&R and the Arora family at the time, and the acquisition of MFG.
“We’ve in effect created two FTSE 100 companies,” Leahy added, explaining that B&M was a constituent of the UK large cap index and MFG probably would be if it was listed.
Last year, the firm raised $26bn for its largest-ever buyout fund despite a broader slowdown in private equity fundraising.
Founded in 1978, CD&R is one of the oldest private equity firms. Its strategy is focused on trying to improve the operations of companies it owns. This has been helped by a deep bench of executives it employs who have experience running some of the world’s biggest companies.
