UK-based EG Group is planning to divest its EG Ampol service station network in Australia. Ampol, EG Group’s wholesale supplier, is considered the most likely purchaser.
EG Group acquired 540 fuel convenience sites from Woolworths in April 2019 for $1.73 billion. The company is now reportedly looking to sell its Australian division to mitigate losses and withdraw from the marketplace.
Insiders report that EG Group and its advisors are in confidential discussions with prospective buyers regarding a sale valued at over $1 billion.
Ampol, EG Group’s wholesale supplier, has surfaced as the possible buyer, given that the service station chain bears its name. Ampol has been delivering fuel to the business under a long-standing commercial agreement dating back to the time when Woolworths was the proprietor.
Over the years, Ampol has made several acquisitions, including Milemaker in Melbourne, Gull NZ, SeaOil and Z-Energy in New Zealand.
As of the end of the previous year, EG Ampol had 517 locations. Its annual sales had fallen 6.4% to $4.24 billion.
EG Group has shut down marginally profitable or loss-making sites. The retail fuel volumes industry-wide have also witnessed a decline as more drivers shift towards hybrid or electric vehicles.
Another significant player in the sector is Viva Energy, which acquired fuel and convenience store chain operator OTR Group for $1.22 billion last year.
What is EG Group planning for its EG Ampol service station network?
EG Group is reported to be planning to sell its EG Ampol service station network in Australia.
Who is the most likely purchaser of this network?
Ampol, EG Group’s wholesale supplier, is considered the most likely purchaser of the network.
What has been the impact on the retail fuel volumes industry-wide?
The retail fuel volumes have declined across the industry as more motorists shift towards hybrid or electric vehicles.
