Wednesday, April 24, 2024

Woolworths Group to sell petrol business to EG Group

Woolworths Group has entered into a binding agreement to sell its 540 Woolworths-owned fuel-convenience sites to EG Group for $1.725 billion.

EG Group describes itself as “the leading independent petrol forecourt retailer in Europe” which is also “having great success in the US”. It operates about 4,700 sites across Europe and North America, and employs more than 28,000 people.

As part of the transaction, Woolworths and EG have entered into a 15-year commercial alliance. It will cover fuel-discount redemption, loyalty and wholesale product supply. Key features of the alliance include the following:

  • Woolworths’ popular four-cents-per-litre fuel discount will continue across the network.
  • Customers will continue to earn Woolworths Rewards points on fuel and merchandise purchases across the network.
  • Woolworths Group will begin a new wholesale food-supply agreement to the network, providing “an extensive product range and competitive pricing”.

Woolworths says all existing Woolworths Petrol management and operations teams will transfer to EG after completion of the sale.

‘A world-class convenience offer’

Woolworths Group CEO Brad Banducci said: “This transaction is a positive for our customers, our team and our shareholders.

“The agreement will continue to strengthen the opportunities our customers have for greater value when shopping with us, with the benefits of the Woolworths Rewards program and the fuel-discount offer set to continue.

“A long-term wholesale food-supply arrangement will also ensure that EG Group can benefit from competitive product sourcing, including Woolworths’ own brands, to provide a world-class convenience offer that will add further scale to Woolworths FoodCo.”

‘An exciting international milestone’

EG Group founder and co-CEO Mohsin Issa said: “For the past 17 years, we’ve had a vision of becoming a leading petrol station/convenience store operator around the world. This is another exciting international milestone on our growth journey.

“We’re the leading independent petrol forecourt retailer in Europe and are having great success in the US. The Woolworths’ assets present a fantastic opportunity to further grow our international footprint and deliver our best-in-class retail experience in a new geography.

“We’re committed to investing in the site network, introducing leading retail brands, developing the alliance with Woolworths, and working with the exceptional management team.”

The companies expect to wrap the sale up early next year. It is subject to Foreign Investment Review Board approval.

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