BP buysWool­worths’ Aus­tralian gas sta­tions for $1.3b

China Daily (Canada) - - VIEWS - By BLOOMBERG

BP Plc will pay A$1.785 bil­lion ($1.3 bil­lion) for Wool­worths Ltd’s net­work of Aus­tralian gas sta­tions in a deal that will ce­ment the Lon­don-based oil com­pany as one of the na­tion’s big­gest fuel providers.

The Bri­tish com­pany will ac­quire 527 fuel out­lets that are sup­plied by ri­val Cal­tex Aus­tralia Ltd, as well as 16 de­vel­op­ment sites, ac­cord­ing to a state­ment on Wed­nes­day from Syd­ney-based su­per­mar­ket own­erWool­worths.

BP al­ready owns 350 re­tail lo­ca­tions across Aus­tralia and sup­plies fuel to an ad­di­tional 1,000 out­lets owned by in­de­pen­dent busi­ness part­ners, ac­cord­ing to a sep­a­rate state­ment from the oil com­pany.

BP and Wool­worths also agreed to a part­ner­ship that in­cludes the con­tin­u­a­tion and ex­pan­sion of a scheme pro­vid­ing fuel dis­counts for su­per­mar­ket cus­tomers.

BP has pre­vi­ously struck deals with re­tail­ers in­clud­ing Marks & Spencer Plc in the United King­dom and REWE in Ger­many.

For Wool­worths, the sale is part of Chief Ex­ec­u­tive Of­fi­cer Brad Ban­ducci’s strat­egy to re­verse the su­per­mar­ket chain’s de­clin­ing for­tunes. Since be­com­ingCEOin Fe­bru­ary, Ban­ducci has cut jobs, writ­ten off as­sets and slowed store open­ings, while sales at its Aus­tralian food di­vi­sion have started grow­ing again.

The sale is “pos­i­tive at the mar­gin” for Wool­worths, ac­cord­ing to Michael McCarthy, chief mar­ket strate­gist at Syd­ney-based CMC Mar­kets Asia Pa­cific Pty.

“Wool­worths’ man­age­ment were just keen to do any deal. While it is good that there’s move­ment, this was prob­a­bly the eas­i­est to do and prob­a­bly the one that makes the least dif­fer­ence.”

Com­ple­tion of the trans­ac­tion is not ex­pected be­fore Jan 2, 2018, and is sub­ject to reg­u­la­tory ap­provals.

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