Wool­worths to sell petrol busi­ness to EG Group for $1.25bn

Gulf Times Business - - BUSINESS -

Aus­tralia’s Wool­worths Group Ltd yes­ter­day said it will sell its petrol busi­ness to Bri­tish petrol re­tailer EG Group for A$1.73bn ($1.25bn).

The deal comes months af­ter Aus­tralia’s largest su­per­mar­ket op­er­a­tor can­celled a A$1.8bn sale of its petrol sta­tions to Bri­tish oil gi­ant BP Plc af­ter it was blocked by Aus­tralia’s an­titrust reg­u­la­tor.

“This trans­ac­tion is a pos­i­tive for our cus­tomers, our team and our share­hold­ers,” Wool­worths chief ex­ec­u­tive Brad Ban­ducci said in a state­ment.

As part of the deal, Wool­worths and EG Group have en­tered into a 15year com­mer­cial al­liance en­com­pass­ing fuel dis­count redemp­tion, loy­alty and whole­sale prod­uct sup­ply. “The Wool­worths’ as­sets present a fan­tas­tic op­por­tu­nity to fur­ther grow our in­ter­na­tional foot­print,” Mohsin Issa, EG Group founder and cochief ex­ec­u­tive, said in the state­ment.

The sale, which con­sists of 540 Wool­worths-owned petrol sta­tions, is a ma­jor part of the Aus­tralian re­tailer’s ef­fort to cut non-core busi­nesses and keep ahead of ri­val Coles.

The deal, which is ex­pected to be com­pleted in early 2019, will be sub­ject to For­eign In­vest­ment Re­view Board ap­proval. Wool­worths said it will con­sider a range of op­tions for the use of pro­ceeds, in­clud­ing cap­i­tal man­age­ment ini­tia­tives.

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