Euro Garages’ parent company EG Group has expanded into Australia through a deal with Woolworths Group to buy its 540-site network for A$1.725bn.
Woolworths Petrol operates a nationwide network of sites and employs about 4,000 people. In the year to 30 June 2018, the business generated A$4.8bn of revenue and sold 3.6 bn litres of fuel.
As part of the transaction, EG Group and Woolworths have entered into a 15-year commercial alliance covering loyalty, fuel discount redemption, and wholesale supply. Key features of the alliance include:
- Woolworths’ four cent per litre fuel discount will continue across the network;
- customers will continue to earn Woolworths’ Rewards points on fuel and merchandise purchases across the network; and
- Woolworths Group will commence a new wholesale food supply agreement to the network, providing an extensive product range and competitive pricing.
With the inclusion of the Woolworths assets, EG Group will own and operate about 5,250 sites across Europe, the US and Australia.
Mohsin Issa, EG Group founder and co-CEO, commented: “For the past 17 years, we have had a vision of becoming a leading petrol station/convenience store operator around the world. This is another exciting international milestone on our growth journey.
“We are the leading independent petrol forecourt retailer in Europe and are having great success in the US. The Woolworths’ assets present a fantastic opportunity to further grow our international footprint and deliver our best-in-class retail experience in a new geography. We are committed to investing in the site network, introducing leading retail brands, developing the alliance with Woolworths and working with the exceptional management team.”
Brad Banducci, Woolworths Group CEO, said, “This transaction is a positive for our customers, our team and our shareholders.
“The agreement will continue to strengthen the opportunities our customers have for greater value when shopping with us, with the benefits of the Woolworths’ Rewards program and the fuel discount offer set to continue.
“A long-term wholesale food supply arrangement will also ensure that EG Group can benefit from competitive product sourcing, including Woolworths’ own brands, to provide a world class convenience offer that will add further scale to Woolworths.”
The transaction is subject to Australian Foreign Investment Board (FIRB) approval.
Completion is expected to occur in early 2019.