BLACKBURN, U.K. -- A recent major U.S. entrant in the convenience-store business continues to beef up its global c-store count by acquiring c-store networks from the supermarket channel.
EG Group, which recently acquired nearly 800 c-stores from Cincinnati-based grocer Kroger and 225 c-stores from TravelCenters of America, has entered into a binding agreement with Australian grocer Woolworths Group Ltd. for the sale of its 540-site Woolworths Petrol network for $1.241 billion.
- EG Group is No. 10 in CSP’s 2018 Top 202 ranking of U.S. c-store chains by number of company-owned retail outlets.
Woolworths Petrol operates a network of sites throughout Australia and employs about 4,000 people. Through June 2018, the business generated $3.46 billion in revenue and sold 951 million gallons of fuel.
Woolworths entered fuel retailing in the late 1990s, establishing gas stations that offer fuel discounts to those purchasing groceries at its stores. In August 2003, it entered into an alliance with Caltex, San Ramon, Calif.-based Chevron Corp.’s brand in the Asia-Pacific region, to operate dual-branded stations. Woolworths operates these sites and obtains all fuels from Sydney-based Caltex Australia.
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. Customers will continue to earn Woolworths Rewards points on fuel and merchandise purchases across the network and Woolworths’ 4-cents-per-liter fuel discount will continue across the network.
Founded in 2001 by brothers Zuber and Mohsin Issa, Blackburn, U.K.-based EG Group is a retail fuel, c-store and foodservice operator with established partnerships with global brands such as Esso, BP, Shell, Carrefour, Louis Delhaize, SPAR, Starbucks, Burger King, KFC, Greggs and Subway. It has about 4,700 fuel and convenience sites across Europe and North America, employing more than 28,500 people. Including the Woolworths assets, EG Group will own and operate nearly 5,250 c-store sites in Europe, the United States and Australia.
“For the past 17 years, we have had a vision of becoming a leading petrol station and convenience-store operator around the world. This is another exciting international milestone on our growth journey,” said co-CEO Mohsin Issa. “We are the leading independent petrol forecourt retailer in Europe and are having great success in the U.S. 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.”
The sale of Woolworths’ c-stores comes after BP and Woolworths announced in December 2016 a $1.287 billion strategic partnership for BP to acquire, rebrand and operate Woolworths’ c-stores. BP said it planned to launch a “world-class” foodservice-focused c-store concept called Metro at BP. In December 2017, the Australian Competition and Consumer Commission (ACCC) quashed the deal. It said that the deal would lessen competition and raise prices because BP supplies fuel to about 1,400 BP-branded stations in Australia, setting fuel prices at about 350 of them.
The transaction with EG Group is subject to Australian Foreign Investment Review Board approval. The companies expect the deal to close in early 2019. Woolworths said it will consider a range of options for the proceeds, including capital management initiatives.