Fu­elling up

Woolies petrol sta­tions sold

The West Australian - - INSIDE COVER - Peter Milne

Wool­worths has sold its 540 petrol sta­tions for $1.72 bil­lion to a British buyer, EG Group, which op­er­ates about 4700 sites in eight coun­tries.

Wool­worths’ cus­tomers will con­tinue to re­ceive fuel dis­counts and earn re­wards points at the EG-owned out­lets un­der a 15-year deal that also in­cludes Wool­worths con­tin­u­ing to sup­ply­ing food to the sites.

About 4000 Wool­worths em­ploy­ees will move to EG, which cur­rently em­ploys 28,000 peo­ple.

EG co-chief ex­ec­u­tive Moshin Issa said the com­pany was com­mit­ted to in­vest­ing in the Aus­tralian op­er­a­tion and in­tro­duc­ing lead­ing re­tail brands.

EG’s sites in Eu­rope fea­ture out­lets such as Star­bucks, KFC and Sub­way.

The Eu­ro­pean sites of­fer petrol from BP, Esso and Shell.

“This is an­other ex­cit­ing in­ter­na­tional mile­stone on our growth jour­ney,” Mr Issa said.

Mr Issa and his brother and co-chief ex­ec­u­tive Zu­ber Issa bought their first petrol sta­tion near Manch­ester in 2001 and ex­panded the busi­ness in the UK.

In 2016, EG merged with a main­land Eu­ro­pean com­pany and in the past 12 months EG has added 1200 sites in Italy, 1000 in Ger­many and 800 in the US to its net­work.

The sale to EG comes af­ter BP pulled out of a deal in June to buy Wool­worths’ petrol sta­tions for $1.78 bil­lion.

The petrol sta­tions were to be changed to a con­ve­nience food for­mat that BP had suc­cess­fully rolled out in Bri­tain and Ger­many. The deal, an­nounced in De­cem­ber 2016, had been op­posed by the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion.

A month later, Cal­tex se­cured a 15-year deal to sup­ply fuel to Wool­worths.

Wool­worths’ big su­per­mar­ket ri­val Coles does not own its 700 petrol sta­tions. Coles, to be de­merged from Wes­farm­ers this month, leases the sites from its fuel sup­plier Viva En­ergy, which pro­duces petrol un­der the Shell brand.

The Wool­worths sale is ex­pected to be com­pleted early next year, sub­ject to For­eign In­vest­ment Re­view Board ap­proval.

Wool­worths said it would con­sider a range of ways to use the pro­ceeds, in­clud­ing cap­i­tal man­age­ment ini­tia­tives.

Wool­worths an­nounced the bind­ing agree­ment af­ter the mar­ket closed yes­ter­day with its shares up 11¢, or 0.4 per cent, to $29.46.

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