Sir Terry Leahy has made a surprise return to retail as non-executive chairman of discounter B&M Bargains, which was snapped up by US private equity giant Clayton Dubilier & Rice on Monday.

Already employed as senior advisor to CD&R, Sir Terry, who retired after 14 years as Tesco CEO in 2011, will assume the role when the B&M deal completes early next year, ending intense speculation over what his next big move would be.

The Grocer understands that he will take a traditional non-exec chairman role, working for up to 20 days a year for the company, while brothers Simon, Bobby and Robin Arora, who bought B&M in 2005 when it had less than 20 stores, retain a stake in the business and manage the day-to-day running.

“Terry will be the chairman and the chairman’s role is very different to that of his former role as CEO at Tesco,” said Rothschild’s Majid Ishaq, who advised B&M during the deal.

“Terry brings a huge wealth of experience of trading towards growth, but also, and hugely importantly, how you take this type of business and drive it internationally.”

Although the price CD&R paid for B&M has not been disclosed, reports put the sum in the region of £965m.

“The price is highly confidential,” said Ishaq. “But it was a good price for the Aroras and a good price for CD&R.”

While CD&R would not reveal the size of the stake it had bought, Ishaq added: “It has certainly been taken north of 50%. But the family has also retained a very significant stake. They were very keen to stay on in a management role.”

The deal means B&M exits The Grocer’s Top 50 ranking of independent UK grocery retailers. It was fourth in the rankings, which lists companies that are more than 50% owned by family or management.