A sign outside an Ampol petrol station in Melbourne, Australia on March 3, 2022. William West/AFP via Getty Images
Ampol will purchase EG Group’s Australian operations in a transaction worth AU$1.1 billion, expanding its service station network across the country.
The deal will give Ampol control of around 500 fuel and convenience sites currently operated by EG Australia, a subsidiary of the British-owned EG Group.
As per Reuters, the acquisition will be funded through AU$800 million in cash, sourced from existing debt, and approximately AU$250 million from the sale of Ampol shares.
Ampol Chairman Steven Gregg said the transaction would deliver scale and operational benefits.
“The combined network will have greater scale and significant cost synergies that will support strong returns and earnings growth for our shareholders,” he said.
Ampol expects the integration to deliver annual savings of between $65 million and $80 million. The company currently supplies fuel to 80,000 customers nationwide and serves around 3 million people each week through its retail outlets.
EG Group’s Exit from Australia
The sale will mark EG Group’s departure from the Australian market, five years after it entered through a $1.25 billion acquisition of Woolworths’ fuel business.
The British-based operator, which has grown to over 6,000 sites worldwide, has been shedding non-core assets to reduce its debt load.
Earlier this week, EG agreed to sell its Italian business for 225 million euro as part of a broader strategy to strengthen its balance sheet.
The company’s net debt stands at about US$5.3 billion, built up during an aggressive acquisition spree, and pre-tax profits have fallen sharply—from US$1.4 billion to US$10 million last year, according to The Times.
The sale of its Australian arm is subject to clearance from the Australian Competition and Consumer Commission.
