Woolworths to divest fuel business to BP for $1.3bn
Woolworths has agreed to divest its fuel business to British oil company BP for AUD1.785 ($1.3bn) besides forming a strategic partnership with the latter.
Its fuel business comprises 527 fuel convenience sites along with 16 sites that are being constructed.
The Australian supermarket company is set to consolidate its balance sheet through the sale proceeds which it intends to reinvest in its core business.
The two companies have forged a long-term partnership wherein they will continue the 4 cents per litre (cpl) fuel discount for a period of at least 10 years through equal funding.
Woolworths CEO Brad Banducci said: “This transaction is a win for Woolworths customers and shareholders.
"For our shareholders, once the Strategic Partnership is established, it will result in Woolworths having a larger platform for our redemption and reward program, as well as providing us with a unique opportunity to partner with and draw on BP’s success in rolling out market-leading convenience food offers globally.”
BP will not only sustain the fuel discount scheme at the current 527 fuel and convenience outlets of Woolworths but also will roll out to some of its own sites.
Apart from this, an improved convenience store offering is said to be developed though the partnership by the combination of Woolworth’s expertise in grocery and BP’s global know-how in developing convenience offerings.
Further, they will also do a pilot project by launching Metro stores in 16 BP fuel and convenience facilities and would later expand it across more than 200 sites.
BP Australia President Andy Holmes said: “This new partnership is great news for all Australian consumers, who will in future be able to enjoy the combination of BP’s premium fuels, a world class convenience food offer and an enhanced loyalty program including the expansion of Woolworths’ 4cpl fuel discount offer.
“We look forward to welcoming Woolworths Fuel Business team members to the BP team. If approved, the acquisition of another 527 fuel and convenience sites as well as a number of sites under construction grows our business substantially and brings with it a lot of opportunity for the team.”
The sale, which is expected to be completed in the next 12 months, is subject to customary closing conditions which include approvals from the Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board (FIRB).
Image: BP has agreed to buy Woolworths’ petrol stations. Photo: courtesy of m_bartosch and Freedigitalphotos.net.