Australia Regulator to Oppose BP Deal for Woolworths' Gas Stations
December 13 2017 - 5:08PM
Dow Jones News
By Robb M. Stewart
SYDNEY--Australia's antitrust regulator will block BP PLC's (BP)
planned acquisition of a network of gas stations across Australia,
which it said likely would significantly reduce competition in
retail fuel supply.
The Australian Competition and Consumer Commission, which had
flagged its concerns several months earlier, said it had determined
that a proposal from BP to sell some of the sites it aimed to
acquire from retailer Woolworths Ltd. (WOW.AU) wouldn't address its
concerns.
At the end of last year, Woolworths entered a binding agreement
to sell a portfolio of about 530 gas stations plus more than a
dozen development sites to BP for 1.79 billion Australian dollars
(US$1.36 billion), aiming to use the proceeds to bolster its
balance sheet and reinvest in its core operations. The deal was a
blow to Caltex Australia Ltd. (CTX.AU), the existing fuel supplier
to Woolworths' outlets.
"This has been the most significant merger investigation and
decision the ACCC has considered in 2017," Rod Sims, chairman of
the regulator, said.
The ACCC said Woolworths was an effective competitor with an
important influence on fuel prices in many markets in the country,
and the sale of its sites to BP would likely lead to higher prices
and reduced competition. BP already supplies fuel to about 1,400
BP-branded service stations in Australia, setting fuel prices at
roughly 350 of them.
"The bottom line is that we consider motorists will end up
paying more, regardless of where they buy fuel, if this acquisition
goes ahead," Mr. Sims said.
The retailer said it was disappointed by the decision and both
it and BP would now assess options.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
December 13, 2017 17:53 ET (22:53 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Caltex Australia (ASX:CTX)
Historical Stock Chart
From Sep 2024 to Oct 2024
Caltex Australia (ASX:CTX)
Historical Stock Chart
From Oct 2023 to Oct 2024