Woolworths Inks Deal With Caltex on Petrol Stations
July 04 2018 - 5:45PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Woolworths Group Ltd. (WOW.AU) said it has signed a new
strategic alliance and 15-year wholesale fuel supply agreement with
Caltex Australia Ltd. (CTX.AU), but it will continue to pursue an
initial public offering or sale of the petrol station business.
The arrangement comes two weeks after oil giant BP PLC (BP) axed
a proposed deal to buy Woolworths's petrol stations after
regulators indicated they would oppose the deal.
Woolworths said 125 Caltex sites would be added to its 638-site
network of petrol stations where consumers can cash in fuel
redemption offers from the Australian supermarket chain.
Woolworths will also start a long-term wholesale food supply to
more than 700 existing Caltex convenience sites and said a new
long-term fuel supply deal will lock in "a market competitive cost
of fuel that is expected to deliver a significant and sustainable
earnings uplift to the Woolworths Petrol business."
The grocer said Caltex will also make a one-off payment of about
50 million Australian dollars (US$37 million) to Woolworths, and
estimated the fuel deal would give it a pre-tax benefit of more
than A$80 million a year.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
July 04, 2018 18:30 ET (22:30 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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