EG Group is set to sell its EG Ampol service station network in Australia, with its wholesale supplier Ampol reported to be the most logical acquirer.
EG Group bought 540 fuel convenience sites from Woolworths for $1.73 billion in April 2019. The company is reportedly seeking to divest its Australian arm to cut losses and exit the market, according to the Australian Financial Review.
Sources with knowledge of the matter said that the firm and its advisers are in confidential talks with potential acquirers about a $1 billion-plus sale. EG Group’s wholesale supplier Ampol has emerged as the most possible buyer, given that the service station chain is named after it.
Ampol has been supplying fuel to the business under a long-term commercial agreement that dates back to when Woolworths was the owner. The company has also made several acquisitions in the past, including Melbourne’s Milemaker, Gull NZ , SeaOil and New Zealand’s Z-Energy.
At end of last year, EG Ampol had 517 locations, with annual sales down 6.4 per cent to $4.24 billion. EG Group has closed marginal or loss-making sites, and retail fuel volumes have declined across the industry as more motorists turn to hybrids or electric vehicles, according to the AFR.
Viva Energy is another prominent player in the sector. The company acquired fuel and convenience store chain operator OTR Group for $1.22 billion last year.
Full story Ampol tipped to buy out service station network bearing its name - Inside FMCG
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