Market - - Dec 29,2016
British multinational Oil and Gas Company, BP (British Petroleum) has snapped a deal worth $1.3 billion (1.8 billion Australian dollars) to purchase petrol station business of Woolworths, the Australian supermarket chain.
BP, headquartered in London, already owns 350 service stations in the country and this deal would add 527 more outlets along with 16 under construction sites. The level of competition in the multi-billion petrol industry in Australia will be triggered as BP will then emerge as the nation’s market leader in fuel supply.
BP expects the deal to be completed by early 2018, subject to approvals from Australian regulatory authorities.
BP and Woolworths have also decided on the trial of a convenience store business at 200 service stations as part of the agreement. BP already runs a success forecourt chain business – Simply Food, in the UK, along with Marks & Spencer. There are around 250 Simply Food outlets at BP stations in the UK, and the oil giant plans to open 50 more in the next year.
Woolworths said that the decision has been taken after several negotiations which took months. Caltex, the current supplier to Woolworths petrol stations, is the under-bidder and will now experience a huge shrink in its market share.
Tufan Erginbilgic, chief executive of BP, said that the company has developed a winning retail formula where it has made partnerships with strong local brands such as Marks & Spencer in the UK and provides its customers with a convenient retail offer that meets their daily needs at a single place.
BP has already announced this month that it would invest almost $1 billion in the exploration of the Tortue gas field off the costs of Senegal and Mauritania. Shares in BP have gone up by more than 40 percent this year, as it is looking for new ways to boost growth after being hit by the slump in global oil prices in 2014.