The grand master behind the Morrison-Anglian tie-up was not Sir Fraser Morrison. Here’s how younger brother Gordon brokered the lucrative deal and stepped into the limelight.
City deals might be presented as the result of complex corporate chess, but their origins are often pleasingly homespun. In the case of Anglian Water and Morrison Group – the odd couple in this summer’s round of corporate unions – it all began just nine weeks before the deal was announced. In late June, as Morrison was plotting its strategy out of the low-margin, low-growth construction environment, there was an unexpected phone call. It was Anglian chief executive Chris Mellor, asking whether Morrison would consider merging the two companies.

But he wasn’t speaking to Sir Fraser Morrison, who most people consider the personification of the Edinburgh-based £500m-turnover company. Mellor was negotiating with his younger brother Gordon, who is now stepping into the limelight. After a decade heading up the group’s glamour-free £200m gas and water contracting division – and several years’ acquaintance with Mellor – it was the younger Morrison who acted as catalyst and contact point in the early stages of the deal.

Gordon Morrison now acknowledges that he is keen to “take a front seat” in the newly merged company, which will be known as AWG – although Morrison’s brand and logo will be retained for its existing activities. Sir Fraser, who in the five years since Morrison’s public listing has enjoyed the Edinburgh head office and attention from journalists and the City, will be in the back seat as a non-executive director. Meanwhile, his younger brother, who made do with an off-the-shelf office block in Stevenage and a public profile so low it was scraping the pavement, will play chess in the AWG boardroom as the director responsible for “asset management”.

The younger Morrison, who prefers a blazer and slacks to a suit and has the casual conversational style of someone who doesn’t believe in trying too hard, shrugs off the suggestion that he has been overshadowed. “Only one person can lead a company – there can only be one chairman and chief executive. One could suggest that I was in a support role, and I’m still in a support role with AWG.” But that role seems to be firing the 49-year-old with considerable enthusiasm. “It’s a challenge

I was looking for. With so much potential, it’s fairly easy to motivate oneself.”

Morrison’s chess game will be played with some interesting pieces. His £500m worth of responsibilities include Morrison’s asset management business, Anglian’s facilities management and the operational business behind Anglian’s water networks, which deliver supplies to nearly 6 million people. Morrison will be putting on his wellingtons to get to grips with pipe networks, sewage plants and treatment plants, as well as subsidiaries such as vehicle management company Powermarque.

So how did a born-and-bred construction director end up on the board of a water company? It’s a question that has puzzled many observers since Anglian Water agreed to pay £262.5m to acquire Morrison Group. Anglian are clearly buying capability in outsourcing contracts from other utilities and entry to the property and transport services market. It is less clear why Morrison, a company that has left its contracting roots to profit from facilities management, the private finance initiative and property development, should feel that losing its independence and becoming Anglian’s services provider is the best way forward.

The answer seems to be that Morrison had moved so far from traditional contracting that it met another company from a different sector doing a similar balancing act. Both were intent on breaking out of the conventions of their industry: before the phone call, Morrison had been considering evolving into a property services company, while Anglian is intent on diversification and expansion in the UK and abroad. Morrison had dropped “Construction” from its name earlier in the year and Anglian had already decided to become AWG.

Morrison says the cultural coincidences between the two convinced each side that they were corporate soulmates. Morrison had been split into three divisions: property development was about “creating assets”, construction about building them and facilities management about looking after them. At Anglian, “a completely different sector but an identical strategy”, the three phases were asset ownership (pipes and property), asset creation (laying pipelines) and asset management (FM). “It was a perfect fit from that first phone call,” Morrison recalls. “And that’s not just hype.”

Hype certainly isn’t Morrison’s style. He spent most of his life based at the company’s home town of Tain, Inverness-shire, where he absorbed plenty of Highland humility and laced it with dry humour. “There, if you say you’re good at something, you’re almost pushed away. In the South-east you can’t survive without saying so. Modesty evaporates once you get to the South – but fortunately not in my case.” This attitude was perhaps behind his decision, earlier this year, to take the title “sales director” to advertise his respect for sales staff and their order books.

Scots reserve also seems to be the keynote in his relationship with Sir Fraser, his elder by exactly three years. “We’ve worked very closely for 25 years in business, and there are no real issues there. As families we’re close, we socialise a lot. It’s just normal.” The two brothers have worked side by side since 1974, when Gordon joined the business established by their father in 1948, following a civil engineering degree at the University of Edinburgh and a year working for Tarmac. Before concentrating on the utility business, Morrison toured the quarry, plant and offshore engineering divisions.

As someone who takes pride in his modesty, Morrison is dismissive of the windfall he and Sir Fraser received in the deal with Anglian. He claims not to remember the exact percentage of Morrison Group in his ownership (21.7%) and shaves an entire lottery jackpot from the sum he received, quoting £50m rather than the true figure of £57m. And his spending plans lack the imagination of most of Camelot’s customers. “If I said it wouldn’t make a difference, which is true, it’s hard for people to comprehend. I have no plans to spend it and I won’t be moving house.”

There have been sniffy suggestions within the industry of a “sell-out”, although this probably disguises envy for anyone who can build a family business into an attractive takeover proposition, and then find such a profitable exit route. But Morrison stresses that half of the £57m package comes as Anglian shares, and that he has an ongoing commitment to the business.

“You couldn’t create a business like Morrison, then sell out and forget about it. The name won’t disappear. It’s been with me a long time – even my wife’s beginning to get attached to it.”

Personal effects

Who’s who in your family? I’m married to Mary. We have a 23-year-old son, David, who’s just back from a round-the-world yacht trip, and a 21-year-old daughter, Morag. Where do you live? A village in Hertfordshire. The house dates back to the 14th century. I’ve got a farming business there, a 1200 acre estate growing cereals – wheat, barley and grass seed. I liked the house and it came with a smallish farm, so I decided to add to it. What do you do in your spare time? I find walking or driving in the fields is a relaxing activity. And I play golf – encouraged by my wife and daughter, who both play. I also enjoy musicals and light opera. What car do you drive? A Range Rover. What book are you reading at the moment? I’m not an avid reader. A book I find quite important is How to Stop Worrying and Start Living by Dale Carnegie.

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