Ampol to buy EG Australia in $1b deal
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More news: Ampol has entered into a share purchase agreement to acquire 100% of the shares in EG Group Australia for a headline price of $1.1 billion.
The cash and scrip deal will see Ampol pay $800 million in cash, to be funded by existing debt, as well as Ampol shares valued at $250 million, to be issued to EG Australia.
Ampol will acquire approximately 500 sites across Australia, with the company stating the deal will enable an estimated $65-$80 million in annual, post-integration synergies.
A press release published by Ampol says that after completion, the fuel and convenience and fuel marketing businesses across Australia and New Zealand will represent circa 85% of Ampol Group earnings.
Ampol will divest around 20 site across locations with network overlap.
The parties aim to complete the deal by mid-2026 and the transaction is subject to clearance from the ACCC.
A statement from EG said BofA Securities acted as exclusive financial advisor and Gilbert + Tobin as legal advisor to EG Group on the transaction. The sale marks EG Group's exit from the Australian market, with proceeds to be used to reduce the Group's debt.
What they said: Ampol managing director and CEO, Matt Halliday said: “The proposed EG Australia acquisition makes sense for Ampol. It is a business and market we understand well through more than 5 years of commercial relationship…For shareholders, the transaction is accretive to earnings per share and free cash flow, underpinned by $65–$80 million in identified synergies from overhead rationalisation, U-GO conversion cost savings and efficient operations and economies of scale – all achievable through proven integration levers."
"It will also provide a greater footprint and flexibility to execute our strategy around electric vehicle charging, to align with the pace of customer adoption, which we see as a vital component to our long-term plans," Halliday continued.
Russ Colaco, CEO of EG Group, said: “This transaction is a significant milestone in our ongoing efforts to streamline EG Group’s global portfolio and sharpen our focus on the markets where we see the largest growth opportunities...We remain fully focused on executing our strategy and building a platform for further growth, with our world-class grocery & merchandise, foodservice and fuel retail proposition."
Ampol expected to unveil $1b buyout of EG Group's Australian assets: reports
More news: Ampol shares remain in a trading halt amid media reports the fuel supplier is in advanced discussions to buy EG Group's Australian service station portfolio for over $1 billion.
Ampol and UK fuel station operator EG Group were finalising a deal this morning, according to a report by the Australian Financial Review. EG Group acquired Woolworths' 540 petrol stations for $1.73 billion in 2019, with Ampol currently supplying the fuel for those sites.
Ampol shares entered a trading halt this morning pending an announcement on a "potential material acquisition transaction".
Ampol enters trading halt ahead of acquisition announcement
The news: Fuel supplier Ampol has entered a trading halt on the ASX as it prepares to announce a "potential material acquisition."
The numbers: Ampol shares last traded at $27.07 per share.
The context: The trading halt will remain in place until the earlier of the planned announcement and the start of trading on Monday.
The sources: ASX, AFR, Reuters, ASX announcement, Transaction overview, EG Group statement
