Ampol completes EG Australia acquisition to expand network across 480 retail sites
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The news: Ampol has finalised its acquisition of EG Australia for a gross consideration of $1.16 billion, a move aimed at expanding the company’s fuel and convenience retail footprint.
The context: Ampol stated that the acquisition will expand its Foodary and U-GO brands across a network of 480 sites with a strong east coast presence in Australia.
Prior to the takeover, Ampol and EG Australia maintained a long-standing wholesale relationship that included long-term fuel supply and brand licensing agreements.
Ampol expects the transaction to generate $65 million to $80 million in annual synergies, driven in part by converting 125 locations into the unstaffed U-GO format. The company subsequently projects further volume and earnings upside from the expanded retail scale.
The company also expects the acquisition to deliver high single-digit earnings per share accretion and double-digit free cashflow per share accretion once the integration is complete.
What they said: “A larger combined network will allow us to better serve a broader customer base through the expansion of our Ampol Foodary convenience retailing network, the accelerated rollout of our value-oriented U-GO offering, and the expansion of the Woolworths Everyday Rewards program,” Ampol CEO Matt Halliday said.
The source: ASX
