Ampol, one of Australia’s leading service station operators, has entered a trading halt as it prepares to announce a substantial acquisition. The company is reportedly close to finalising a $1 billion takeover of the EG Group, a British-owned network of over 500 service stations in Australia.
This morning, Ampol formally requested the trading halt from the share market, which was granted to prevent any misinformation among shareholders due to the anticipated announcement. The firm clarified the halt is necessary to ensure that trading does not occur on an uninformed basis. The Australian Financial Review reports that this significant acquisition includes the EG Group’s petrol stations, many of which already feature the Ampol brand, given that Ampol is the fuel supplier for these locations.
The prospective purchase is notable for EG Group, which had entered the Australian market in 2019 by acquiring the Woolworths Petrol business along with its 540 outlets for a staggering $1.73 billion. The proposed selling price of $1 billion indicates a considerable loss on that initial investment for EG Group.
Despite being a significant player in the fuel sector, market conditions have changed recently, resulting in decreased fuel consumption. Factors such as the rise of electric vehicles, improved fuel efficiency in new cars, and the increasing prevalence of remote working have contributed to this shift in consumer behaviour.
Ampol is expected to make an official announcement regarding the takeover later this week, with the trading halt set to remain in effect until the market opens on Monday.