Woolworths to sell off petrol stations
WOOLWORTHS and BP will develop a joint fuel convenience store called Metro at BP after the retailer struck a deal to sell its petrol stations to the oil and gas multinational for $1.79 billion.
BP has agreed to buy Woolworths' 527 fuel convenience store outlets and 16 development sites.
The deal with BP ends the ambitions of fuel retailer Caltex, which had made an offer to buy the Woolworths service stations.
Under the deal Woolworths' four cents per litre fuel discount offer and customer rewards programs will be maintained and expanded to some BP stations.
Woolworths chief executive Brad Banducci said the Metro at BP concept would be trialled at pilot sites and, if successful, would be rolled out at up to 200 BP convenience stores across the country.
"It will result in Woolworths having a larger platform for our redemption and reward program, as well as providing us with a unique opportunity to partner with and draw on BP's success in rolling out market-leading convenience food offers globally," Mr Banducci said in an announcement to the ASX.
BP Australia president Andy Holmes said his company had already experienced success in similar strategic partnerships around the world, including with Marks & Spencer in the UK and REWE in Germany.
"This new partnership is great news for all Australian consumers, who will in future be able to enjoy the combination of BP's premium fuels, a world class convenience food offer and an enhanced loyalty program," Mr Holmes said.
Mr Banducci said while a number of parties had expressed interest in the fuel business, BP's offer met Woolworths' long-term goals and offered better shareholder value.
Woolworths said the proceeds from the sale would be used to strengthen its balance sheet and reinvest in the core supermarkets business.
The deal will need approval by the Australian Competition and Consumer Commission as well as the Foreign Investment Review Board.
It is expected to be completed no earlier than January 2, 2018, with Woolworths' existing Caltex co-branded sites continuing to operate in the interim.