Z Energy in $785m Caltex NZ takeover deal

Listed New Zealand retail and transport fuels supplier Z Energy has signed an agreement with a Chevron Corporation subsidiary to acquire Caltex’s retail operations in New Zealand for NZ$785 million (A$727m), that would see Z Energy hold close to 49% of the NZ fuel market.

An analyst said the Z deal would leave the market dominated by the three big players, Z, BP and Mobil with a combined share of around 90%.

The acquisition is subject to clearance under the Commerce Act 1986 and consent of the Overseas Investment Office (OIO), with Z aiming to settle the deal by the end of November.

The deal is for Chevron’s downstream operations in New Zealand, including Chevron-owned service stations and lubricant interests.

Z Energy chief executive, Mike Bennetts, said the acquisition was a major opportunity in the company’s development, with substantial advantages for the New Zealand market.

“Z is a Kiwi company, all of our people live here and we’re all completely focused only on serving the New Zealand market and Kiwi customers, Mr Bennetts said.

“Z and Caltex are only two players in a very dynamic marketplace in which there are currently five importers of refined fuel and crude oil and where motorists have the choice of at least a dozen fuel retailers.”

There will be benefits for the expanded company from procurement, operating cost and supply chain efficiencies achievable under common ownership and systems.

Mr Bennetts said Z will continue to operate the Caltex brand and have two brands throughout the combined service station network.

Z Energy, which had annual sales revenue of $3.064 billion in 2014, owns a 15.4% stake in Refining NZ, New Zealand’s only oil refinery; a 25% stake in Loyalty New Zealand; over 200 service stations and 90 truck stops; and terminal infrastructure around the country.

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