Woolies off­loads fuel net­work for $1.73bn

Herald Sun - - BUSINESSDAILY - JOHN DAGGE RE­TAIL

WOOL­WORTHS has struck a deal to sell its petrol sta­tion net­work for $1.73 bil­lion to a UK re­tail group.

The su­per­mar­ket gi­ant said its 540 sites would be sold to Bri­tish petrol-sta­tion owner EG Group.

Pre­vi­ously, the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion had re­jected an at­tempt by Wool­worths to sell its petrol-sta­tion busi­ness to BP for $1.8 bil­lion.

As part of the lat­est trans­ac­tion, Wool­worths and EG have struck a 15-year com­mer­cial al­liance cov­er­ing fuel dis- count dock­ets, loy­alty pro­gram points and the sup­ply of gro­cery items to the sta­tions.

Wool­worths chief Brad Ban­ducci said the su­per­mar­ket chain’s 4c-per-litre fuel dis­count would con­tinue to ap­ply across the net­work af­ter the change of own­er­ship.

Cus­tomers would still earn Wool­worths Re­wards points on fuel and mer­chan­dise pur­chases, and the su­per­mar­ket gi­ant would launch a new whole­sale food sup­ply agree- ment with EG. “This trans­ac­tion is a pos­i­tive for our cus­tomers, our team and our share­hold­ers,” Mr Ban­ducci said.

“The agree­ment will con­tinue to strengthen the op­por­tu­ni­ties our cus­tomers have for greater value when shop­ping with us, with the ben­e­fits of the Wool­worths Re­wards pro­gram and the fuel dis­count of­fer set to con­tinue.

“A long-term whole­sale food sup­ply ar­range­ment will also en­sure that EG Group can ben­e­fit from com­pet­i­tive prod­uct sourc­ing, in­clud­ing Wool-

worths’ own brands, to pro­vide a world-class con­ve­nience of­fer that will add fur­ther scale to Wool­worths.”

How Wool­worths’ brand­ing will be used across the net­work fol­low­ing the change of own­er­ship is still be­ing ne­go­ti­ated.

EG op­er­ates 4700 petrol sta­tions across Eu­rope and North Amer­ica, em­ploy­ing 28,000 peo­ple.

Wool­worths’ petrol man­age­ment and em­ploy­ees will trans­fer to EG once the sale has been com­pleted.

EG will also set the pump price fol­low­ing the deal.

EG Group founder Mohsin Issa said Wool­worths’ net­work pre­sented a fan­tas­tic op­por­tu­nity to fur­ther grow EG’s in­ter­na­tional foot­print and de­liver a best-in-class re­tail ex­pe­ri­ence in a new ge­og­ra­phy.

“We are com­mit­ted to in­vest­ing in the site net­work, in­tro­duc­ing lead­ing re­tail brands, de­vel­op­ing the al­liance with Wool­worths and work­ing with the ex­cep­tional man­age­ment team,” Mr Issa said.

The deal must be ap­proved by For­eign In­vest­ment Re­view Board.

Wool­worths said it ex­pect- ed to get this ap­proval early next year. Mr Ban­ducci said Wool­worths, which also owns Dan Mur­phy’s and Big W, would con­sider “a range of op­tions” for the use of the sale pro­ceeds, in­clud­ing re­turn­ing the cash to share­hold­ers.

Wool­worths ex­tended its part­ner­ship with fuel sup­pler Cal­tex in July af­ter the ACCC de­clined to ap­prove the BP trans­ac­tion late last year.

A Wool­worths spokesman said the part­ner­ship with Cal­tex, which will in­volve it open­ing 250 Metro con­ve­nience out­lets, would not change.

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