Perhaps the lesser of the four major fuel players in the Australia retail fuel market, BP could be about to leap its way to the top.
The British fuel giant has signed on the dotted line to acquire 527 outlets from another giant, Woolworths, plus an additional 16 development sites.
The deal is worth a reported AU$1.8 billion, and will see BP’s presence in the Australian retail fuel market increase dramatically if it chooses to rebrand the sites.
Regardless, a key component of the deal will see the preservation of Woolworths’ precious fuel discount docket scheme.
The pair is also believed to be considering a trial of co-branded convenience stores, initially rolled out through 200 sites.
For Woolworths, it’s arguably an unhappy exit from the retail fuel game despite big plans in its earliest years.
A series of ‘shoebox’ sized convenience stores were supposed to drive customers into supermarkets for their groceries. But instead, customers seemingly preferred the established sites which offered more than just fuel with a 2c per litre discount (in the beginning, the now-standard 4c per litre discount was established in the years that followed).
Woolworths quickly found itself on the back foot when rival Coles surprised the market with its Shell deal, which saw Coles jump from nowhere to roughly quadruple the number of sites owned by Woolworths overnight. The former had little choice but to quickly establish a partnership with one of the remaining fuel companies, signing a deal with Caltex shortly after.
A slump in grocery and fuel sales coupled with the public failure of its Masters hardware chain forced Woolworths to boost its capital - and place its fuel sites on the market.
Pending approval from the Australian Competition and Consumer Commission (ACCC), and the Foreign Investment Review Board (FIRB - considering BP’s British heritage), the deal is expected to be finalised in around 12 months.
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