Published: Thu, December 29, 2016
Medical | By Benjamin Edwards

BP buys Woolworths fuel business in Australia for $1.3 bln

BP buys Woolworths fuel business in Australia for $1.3 bln

It intends to use these proceeds to strengthen the Woolworths balance sheet and reinvest in its core businesses, including its supermarket stores. Caltex, which now supplies fuel to Woolworths, also put in a bid for the petrol business, but evidently didn't offer up enough cash.

Motorists could get cheaper petrol with supermarket giant Woolworths partnering with oil and gas multinational BP to create a new line of fuel convenience stores called Metro at BP.

The sale to BP will include Woolworths' 527 fuel convenience sites and 16 development sites, but is not expected to be completed until January 2018.

Perhaps the lesser of the four major fuel players in the Australia retail fuel market, BP could be about to leap its way to the top.

The deal will also extend the Woolworths Rewards program and reward customers for loyalty and support. "Importantly this partnership will enable us to jointly roll-out a new, world-class fuel and convenience food offering that replicates BP's successful partnership with Marks & Spencer in the United Kingdom".

The deal is subject to approval from the Australian Competition & Consumer Commission (ACCC).

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Woolworths Rewards Members will be able to earn points on both fuel and in-store purchases as well as redeem points on purchases across BP sites.

At the start of December, BP announced that it would inject nearly 1 billion United States dollars (£800 million) to explore the Tortue gas field off the coasts of Mauritania and Senegal.

The two companies have forged a long-term partnership wherein they will continue the 4 cents per litre (cpl) fuel discount for a period of at least 10 years through equal funding.

Woolworths CEO Brad Banducci says the deal is a win for Woolworths customers and shareholders.

BP Australia president, Andy Holmes said, "We are excited to bring BP's global expertise and success in food and convenience offers to Australia through this partnership with Woolworths".

The idea is modelled on similar BP partnerships with convenience store chains in Europe, including with Marks & Spencer in the United Kingdom and REWE in Germany.

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