When stories emerged earlier this year about Gerald Ronson being the lead bidder for the Total network, it took the industry by surprise. But even more surprising has been the emergence of Shell as the subsequent buyer of more than half of Total’s company-owned sites.


Despite agreeing to sell its Stanlow refinery to Indian oil company Essar Energy in March this year, Shell UK is expanding its company-owned network by purchasing 254 of the 810 sites Rontec Investments has acquired from Total. The sites will be operated by Snax 24 under a management services agreement until they are migrated into Shell’s company-owned network.


Rontec Investments, the consortium comprising Snax 24 which currently operates 75 sites and investors Grovepoint and Investec, will own 238 former Total sites and supply a further 318 Total dealers. The deal will make Snax 24 the number-one independent forecourt retailer in the UK. Also included in the acquisition is Total’s Butler heating oil business, the associated logistics infrastructure, as well as its Channel Islands and Isle of Man businesses.


Gerald Ronson, chairman of Snax 24, said: "This transaction marks Snax 24’s return to the fuel business in scale. We are delighted to be acquiring this already well-run business and believe that our independence will enable us to create further opportunities and drive innovation."


News that Shell would take ownership of a large proportion of the Total network has prompted the industry to question why it has made such a move when many other oil majors are retreating from company-owned site operation.


A spokesman for Shell said fuel retailing in the UK remained a high-volume, low-margin business due to strong competition driving down prices. "Having a stronger position in this highly competitive market still offers opportunities for growth, which is why we are making this investment," he said. "The sites acquired by Shell are a good fit with our existing network and will allow us to increase our volume.


"Shell will acquire the property assets only and for an interim period following completion the petrol stations run on the Shell company-owned sites will be operated by Snax 24 under a management services agreement with Shell," added the spokesman. "Shell sets the price on company-owned sites."


Absorption of the operation of the newly acquired sites into the Shell network will happen over a 12-18 month period so as to minimise disturbance to the existing business. The agreement is subject to certain conditions and completion expected at year-end.


One property expert has described Shell’s decision to expand its company-owned network as "surprising". Adam Wadlow, partner at Barber Wadlow, said: "It flies in the face of what every other oil company is doing at the moment. It seems rather bizarre since the company has sold its refinery at Stanlow, so there would appear to be no need to shift volume. However, we don’t know what supply agreement commitments Shell may still have with the refinery.


"Whatever its reasons, it’s an amazing deal for Shell, which is building a strong network of sites in the UK. Its sites are mainly fuel focused as opposed to shop focused a different emphasis to other sites. It’s a very attractive network. Shell runs a very efficient business keeping costs to a minimum."


It will take some months for the transaction to be completed and details regarding branding on both the Rontec network and the sites moving over to Shell to be clarified. But Wadlow believes Shell has the ability to re-brand as soon as possible. "I can’t imagine the company would want to be selling Total-branded fuel," he said.


Wadlow also believes the deal with Shell is unlikely to be the last one Rontec makes. "I wouldn’t be surprised if Gerald sells other sites from the Total network I can’t imagine he would sit still," he said. "There is likely to be such strong occupier interest such as from major supermarkets who want to expand their convenience store network; or new industry operators.


"There is plenty of opportunity for the Total sites to be sold as there is a lot of untapped potential within the network. It has not been exploited as other oil company networks have, such as with joint ventures. This was presumably always part of Total’s exit strategy, made many years ago.


"The forecourt industry remains very attractive there is a great deal of demand to get into the sector," adds Wadlow. "Plus it is very encouraging for the sector that a deal like this can happen. But funding is tremendously difficult. For this reason I don’t think the completion of this deal will open the floodgates particularly in terms of other acquisitions, as the deals are taking a long time.


"Gerald knows the market very well, he has great expertise and experience and therefore could convince equity providers that this is a good market deal. His reputation means that if he is prepared to go into it, so will others. It will be interesting to have him in the market with such a substantial network again.


"However, I believe there will be further consolidation in the market, with more big groups formed Snax 24 and MRH won’t be the only two. Economy of scale is key in running a forecourt business these days. You need strength when going in to bat with any oil company. You have a lot of muscle with a big network. It will be fascinating to see what happens."


The move by Shell to expand its company-owned network poses some major concerns to independent retailers. Brian Madderson, chairman of RMI Petrol, said: "Are we going to see a continuation of the aggressive pricing on Shell company-owned sites where in some cases we have seen prices below levels they are prepared to sell to dealers?


"Secondly, will they actually be interested in dealer business going forward or will they have enough company-owned sites to keep the brand totally within the company and not bother with the dealer market at all? Where does it leave the market is it becoming even less competitive than before because yet another major brand will not be available to dealers?


Independent retailers have expressed disappointment at Total’s withdrawal and concern about the potential diminishing number of brands available to dealers in the UK. Derek Lodge, chairman of Rusdene Services, said: "We are absolutely disappointed that Total has withdrawn from the market because it’s the elimination of yet another major brand, which is not good news for independents. The problem is exacerbated by all the refineries being sold, too, so the whole route to market is going to change over the next few years, which will create problems for independents.


"My guess is Shell will withdraw from supplying independent dealers and run a business of exclusively company-owned estates. That is another potential supplier of independents eliminated.


"It’s a worry for independents if Shell will reduce their involvement with independent dealers and that again reduces the supply opportunities. There are new entrants coming into the market but it will take some years for that to shake down."


Patrick Sewell, managing director of Sewell Retail, said: "We’re in talks with Total but the information coming out is still very vague as to what the implications will be. There are lots of questions at the moment but not many answers.


"We’ve had a great relationship with Total over the years they have been a very genuine company to deal with. Now, it’s change and opportunity. We are keeping our options open."


Iain Cracknell, communications manager for Total UK, said: "For Total and its dealers, it remains business as usual and we will continue to provide all of our customers with an excellent level of service and competitive pricing. Our dealers and customers remain, as always, our number-one priority."




the INVESTORS: in their own words


Grovepoint Capital

Grovepoint is a London-based, independent principal investment firm founded in 2010 to focus on transformational opportunities of significant scale. In addition to investing itself, Grovepoint brings extensive experience in leading and arranging, advising on and structuring investments in major enterprises.

The firm has flexible time horizons and will often take a long-term view of its investments. Grovepoint’s approach is to unlock value, together with its partners, across all aspects of a business; including operations, management, finance, strategy and governance.


Investec is an international specialist bank and asset manager that provides a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia as well as certain other countries.

The group was established in 1974 and currently has approximately 7,200 permanent employees.

Investec focuses on delivering distinctive profitable solutions for its clients in six core areas of activity namely, Asset Management, Wealth and Investment, Property Activities, Private Banking, Investment Banking and Capital Markets.

In July 2002 the Investec group implemented a dual listed company structure with listings on the London and Johannesburg Stock Exchanges. The combined group’s current market capitalisation is approximately £3.9bn.




history of snax 24



1966 Heron International, founded by Gerald Ronson (pictured below), opened its first service station in St Albans.

1967 26 service stations operational by the year-end. Heron sold 35 sites to Shell-Mex and BP. Under a management agreement, Heron agreed to operate two thirds of the sites.

1970 Over 100 service stations developed and owned mainly in the South of England. Throughput at these service stations averaged in excess of 600,000 gallons per annum six times the national average.

1971 Heron continued to operate stations for BP and Shell-Mex and entered into a longstanding relationship with Texaco to develop 160 sites.

1972 During the financial year, Heron opened 46 service stations, following planned expansion into the Midlands and North West of England.

1975 By the year-end, Heron was the largest independent retailer in the UK, operating stations for all the major oil companies, including Texaco, Shell, BP, Esso and Mobil. The company also developed its own Heron petrol brand, which was sold in the Midlands and North West of England.

1984 Commendation received from the Road Transport Industry Board for Heron’s management training.

1986 Heron announced its intention to develop 200 fully owned service stations. Heron announced its appointment as consultants to the Spanish National Petroleum Marketing Authority.

1988 Heron launched its big ’H’ petrol brand.

1991 Heron announced the sale of around 150 service stations to Elf.

1992 Heron unveiled the Snax 24 retailing concept.

1993 Management buyout and the formation of Snax 24.

1994 The National Association of Convenience Stores (NACS) features Snax 24 to over 7,000 delegates at their convention in New Orleans. Snax 24 moves its network from directly managed to commission operated.

1995 Snax 24 is nominated for the ’Forecourt Shop of the Year’ award at the annual industry convention. Snax 24 dispenses with the big ’H’ petrol brand and signs up with major oil company brands such as BP, Shell, and Jet.

1997 Snax 24 unveils its latest design in the Snax 24 retailing concept. This latest store design includes the best of the existing store layouts as well as the latest innovations in respect of equipment, layout and customer services.

1999 Snax 24 introduces off licences and cash machines.

2002 Shell asks Snax 24 to run some of their company owned sites in Scotland and East Anglia, terminating in 2006.

2005 BP asks Snax 24 to run some of its company-owned sites in Scotland and England.

2008 ESSO asks Snax 24 to run some of its company-owned sites in England, Scotland and Wales.






Rontec Investments has acquired 810 sites from Total UK.

254 sites flipped to Shell are to be operated by Snax 24 under a management services agreement.

Rontec Investments will own 238 Total-branded sites and supply 318 dealers.

Snax 24 currently run 75 sites, including 44 owned and 31 operated.