Private equity-owned Motor Fuel group has announced it has agreed to acquire MRH in a deal valued at £1.2bn to form UK’s biggest forecourt operator.

Lone Star-owned MRH is currently the UK’s largest petrol station and convenience retail operator and the combined group will operate around 930 company-owned and franchisee-operated sites.

The transaction will create the UK’s largest operator by number of sites and the second largest by fuel volume. On a combined basis, MFG and MRH sold approximately 3.6 billion litres of fuel in 2017.

Alasdair Locke, chairman of MFG, will remain chairman of the combined business.

Sir Terry Leahy, a senior advisor MRH owner Clayton, Dubilier & Rice and the former chief executive of Tesco, will continue to serve on the board of directors and chair the executive committee.

CD&R partner Marco Herbst commented: “Both MFG and MRH operate in a stable market and are highly focused on convenience with a track record of consistent growth and commitment to operational excellence.

“As petrol forecourts transition to customer-focused convenience and food-to-go hubs for local communities, this platform is distinctly positioned to meet this growing demand across the U.K.”

Locke added: “This is a transformational milestone for both companies that we believe will make us an even stronger partner for fuel brands and retail customers seeking convenient foodservice options.”

William Bannister, MFG’s CEO said: “This acquisition gives us the opportunity to develop our winning forecourt formula and will enable us to achieve our long-stated objective to be the UK’s most dynamic and profitable independent forecourt operator.”

The transaction is expected to close in the second quarter of 2018, subject to customary regulatory approvals.

Media reports surfaced in January that Motor Fuel Group was eying a bid for MRH to create a £2.5bn fuels giant.

MRH owner Texas-based private equity firm Lone Star was also understood to be exploring options for a stock market listing as part of a dual-track sales process.