Eagers flags dealer sale
Kloster offload critical for takeover approval
AP EAGERS will offload a major dealership in NSW as it seeks the green light from the competition watchdog for its $2.42 billion takeover of Perth-based Automotive Holdings Group (AHG).
Brisbane-based Eagers said yesterday that it would sell the Kloster Motor Group, an 85-year-old car retailer based in the Hunter Valley and Newcastle, for $54 million to allay concerns from the Australian Competition and Consumer Commission about the takeover in that market.
Kloster operates dealerships in Newcastle, Cardiff and Maitland selling BMW, Ford, Honda, Mini, Nissan and Volkswagen cars.
The 106-year-old Eagers wants to merge with its major competitor to create the country’s biggest car retailing group.
ACCC acting chair Delia Rickard said last week that combined, AP Eagers and AHG would operate 46 per cent of new car dealership sites in the Newcastle/Hunter Valley region, including those for the 10 most popular brands.
It also would control 54 per cent of the dealership sites selling those brands.
In metropolitan Newcastle alone, the combined company would operate 77 per cent of dealership sites selling the 10 most popular brands.
The ACCC has indicated that the proposed acquisition is unlikely to substantially lessen competition for the supply of new cars in Melbourne, Sydney and Brisbane.
AP Eagers said it had entered into a head of agreement to sell Kloster to the Tony White Group to assist in securing ACCC approval for the AHG deal.
The sale is expected to be completed by November.
AP Eagers CEO Martin Ward said the Tony White Group represented an excellent fit for Kloster.
The ACCC will make a final decision on the AHG takeover by July 26.