Ampol has entered into an agreement to acquire EG Group’s service station network in Australia for a headline price of $1.1 billion.
The petrol and diesel company said in a statement on Thursday it would buy approximately 500 EG Ampol fuel and convenience sites from the UK-based group in a deal that would “strengthen its position as one of Australia’s leading transport energy providers.
Ampol will pay for the acquisition with a mix of cash and scrip. It estimates the deal will create synergies of $65–$80 million annually post-integration.
The transaction is expected to close in the middle of next year, subject to clearance from the Australian Competition and Consumer Commission (ACCC).
Ampol plans to divest approximately 20 sites across locations where network overlap will occur as part of its application to the ACCC. It expects the fuel and convenience and fuel marketing businesses will represent about 85 per cent of total earnings after the deal is complete.
“The combined network will offer greater choice and convenience, enabling us to better serve a broader customer base,” said Ampol MD and CEO Matt Halliday. “Key to this will be the expansion of our premium Ampol Foodary convenience retail network, the rollout of our value-oriented U-Go offering, and extension of Woolworths Everyday Rewards.”
“It will also provide a greater footprint and flexibility to execute our strategy around electric vehicle charging, to align with the pace of customer adoption, which we see as a vital component to our long-term plans,” he added.
EG Group bought 540 fuel convenience sites from Woolworths for $1.73 billion in April 2019 to enter the Australian market. The group’s Australian service station network was named EG Ampol as Ampol is the wholesale supplier.
Ampol has been supplying fuel to the business under a long-term commercial agreement that dates back to when Woolworths was the owner.
According to the AFR, the deal would put Ampol on par with Viva Energy as Australia’s biggest petrol station businesses with about 1300 sites.
Ampol previsouly put its shares on a trading halt on the ASX, pending the release of the announcement on this deal.
