7-Eleven Australia Buys Exxon Mobil Filling Stations

Thursday May 27, 2010
Bloomberg

7-Eleven Australia Buys Exxon Mobil Filling Stations -By Ben Sharples

May 27 (Bloomberg) -- 7-Eleven Stores Pty Ltd., a closely held convenience store operator, agreed to buy 295 Australian gasoline filling stations from Exxon Mobil Corp., elevating the company to the nation’s largest independent fuel retailer.

Completion of the sale is expected to take several months, Exxon Mobil’s Australian unit said in a statement. The purchase isn’t subject to approval from the Australian Competition and Consumer Commission, Melbourne-based 7-Eleven said in a separate statement. Neither company gave a value for the transaction.

Caltex Australia Ltd., the nation’s biggest oil refiner, last month scrapped plans to buy 302 filling stations from Irvin, Texas-based Exxon Mobil for A$300 million ($247 million) after the Australian Competition and Consumer Commission opposed the transaction on concerns it would lead to higher prices. The acquisition will give 7-Eleven “just under” 10 percent of the retail fuels market, Spokeswoman Tracy Hammon said by phone.

“This deal with Mobil will build on 7-Eleven’s position as the leader in the convenience retailing industry in Australia, taking the number of 7-Eleven stores from 400 to more than 650,” Chairman Russell Withers said in an e-mailed statement. On completion, the group is expected to become the third-largest private company operating in the country, 7-Eleven said.
Rebecca Arnold, a spokeswoman in Melbourne for the Texas- based Exxon Mobil, and 7-Eleven’s Hammon, declined to provide a value for the transaction when contacted by telephone today.

Fuel Market

Independent retailers, which purchase fuel from local refiner-marketers and sell it through their company-owned sites, represented about 9 percent of the market at June 30, 2009, according to Australian Competition and Consumer Commission. 7- Eleven had about 200 filling stations prior to the Exxon Mobil transaction, Hammon said.

Exxon Mobil had an 11 percent share compared with the 16 percent outright share of Caltex and 23 percent it holds through a venture with Woolworths Ltd., the regulator said.
“Mobil is now a relatively small participant in that sector of the market following the extensive rationalization of its company owned” filling station network, Fuels Director Kim MacMillan said in the statement. “We continue to be a major fuel wholesaler to the commercial and industrial sectors.”

7-Eleven’s acquisition of the filling stations will create a merged entity with projected sales of more than A$2.84 billion, the company said. It expects sales to exceed A$1.4 billion in the 2010 financial year. The Australian 7-Eleven is closely held by the Withers and Barlow families which brought the brand to Australia in 1976 through a license agreement with the U.S. company, then known as Southland Corp., the company said on its website.

--Editors: Ang Bee Lin, Ryan Woo.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Jane Lee in Kuala Lumpur at jalee@bloomberg.net