Caltex to purchase Gull NZ

terminals Gull New Zealand Caltex Australia
The acquisition of infrastructure such as Gull’s retail operating assets and the Mount Maunganui import fuel terminal will assist Caltex to meet strategic objectives.

Caltex Australia will purchase Gull New Zealand (Gull) for approximately A$325 million (NZ$340 million) under the terms of an agreement entered into in December last year.

Once completed, the transaction will see Caltex acquire Gull’s Mount Maunganui import fuel terminal and retail operating assets. The Mount Maunganui terminal is the largest facility of its type in New Zealand with total storage of approximately 90ML.

According to Caltex, the acquisition will optimise its infrastructure position, build trading and shipping capability, grow the supply base and enhance the company’s retail fuel offering through low risk entry into a new market.

As part of the transaction, Caltex will retain Gull’s Brand, management and employees.

Gull has operated in the New Zealand fuel market since 1998 and is positioned as a challenger brand. It has 77 retail sites in total, including 55 controlled retail sites (around one-third of sites unmanned) and 22 supply sites. It also provides fuel to numerous commercial (B2B) customers.

The transaction is scheduled for completion in the second quarter of 2017, subject to New Zealand regulatory approval (New Zealand Overseas Investment Office).

Gull sells around 300ML of transport fuel (petrol and diesel) representing around 5 per cent of the New Zealand market.

Caltex notes Woolworths’ announcement in relation to the sale of its fuels business

Days after announcing the Gull acquisition, Caltex Australia noted the December 28 announcement from Woolworths Limited that it has entered into an agreement to sell its fuels business and enter a strategic partnership with BP.

Caltex had previously disclosed it had made a conditional and confidential proposal to Woolworths to acquire its fuels business and continue the two companies successful fuel alliance.

The proposal, which Caltex believes represented full and fair value, took into account the declining trend in supermarket fuel redemption volumes, the restrictive commercial terms to enable the ongoing provision of a fuel discount offer by Woolworths, and the fact that the Woolworths network is leased rather than owned.

Caltex CEO Julian Segal said the company retained financial discipline in this process and remains focussed on the creation of top quartile total shareholder returns driven by profitable, capital-efficient growth.

“Whilst we are naturally disappointed that the successful fuel alliance will come to an end, it is important that we exercise financial discipline in pursuing growth. That growth must be in the best interests of Caltex shareholders.”

Caltex’s 3.5 billion litre fuel supply arrangement with Woolworths is linked to Woolworths’ continued ownership of the business. As regulatory approvals will be required for the sale, any transaction remains uncertain and will take time to complete. Until such time as regulatory approval is given and the transaction is complete, Caltex will continue to provide reliable and high quality fuel supply to Woolworths and its customers.

“Caltex will continue to pursue profitable growth by securing new wholesale and retail volumes, such as the recent Milemaker and Gull acquisitions, and investing in our supply chain, including our retail network and core transport fuels infrastructure,” Mr Segal said.

“Caltex will now continue to pursue adjacent business opportunities, including our unique convenience retail offering, supply chain management, infrastructure services and product sourcing. This includes investing in capabilities and businesses that leverage our existing consumer and mobility assets, such as retail convenience.”

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