(EnergyAsia, February 28 2014, Friday) — Caltex Australia said it has agreed to acquire retailer Scott’s fuel divisions including its businesses known as Scott’s Agencies and Sabadin Petroleum for a total outlay of approximately A$95 million. (US$1=A$1.1).
Caltex will acquire Scott’s 28 retail sites and 18 depots as well as cover working capital and related acquisition costs.
Australia’s leading downstream company said the addition of this retail asset will support its recent supply chain investments including the soon-to-be-commissioned A$85 million fuel terminal at Pelican Point, South Australia
Financially, the acquisition, which is due to close in mid-2014, is expected to be earnings-accretive by the end of its first full year of operation.
Caltex Australia managing director and CEO Julian Segal said the acquisition is consistent with Caltex’s strategy of being Australia’s leading transport fuels provider.
“Strategically the acquisition is a good fit. It is consistent with our strategic pillars of offering a comprehensive and targeted offer to customers across products, sales channels and geographies. This acquisition once again demonstrates our commitment to fuelling Australia into the future.”
The ASX-listed company, which is half-owned by US major Chevron, is looking to boost its retail and trading operations to offset the negative influence of its refining business.
Last week, it blamed a 28% fall in annual profit to A$332 million on poor refining margins and a weaker Australian dollar.
Australian refiners have been reeling over the last decade from the onslaught of cheaper imported fuels produced by much larger and more sophisticated oil refineries in China, India and Singapore.
Caltex has affirmed its decision to convert its ageing refinery at Kurnell in Sydney into a fuel terminal by end-2014 while keeping its other refinery at Lytton in Brisbane.