Commerce Commission clears Chevron New Zealand acquisition
New Zealand’s Z Energy Ltd. said its focus would be on the safety and integrity of operations and serving its customers, following the Commerce Commission’s clearance today of its application to acquire 100% of the shares of Chevron New Zealand.
Z Energy applied for clearance on June 30, 2015 for a purchase price of NZD 785 million (USD 545 million). Today, the Commerce Commission cleared the transaction on the basis that, subject to Z Energy’s undertaking to divest certain assets, the acquisition of Chevron New Zealand by Z Energy would not substantially lessen competition. The regulator stipulated that Z Energy must divest 19 retail sites and one truck stop in locations “where the Commission considers competition would be substantially reduced as a result of the merger.”
“As a local company, we believe buying the business of a global company is good for New Zealand and it’s now up to us to prove it. We will start this journey as a new company exactly as we intend to continue – by ensuring our focus is squarely on the safety of our operations and on the customers and communities we serve,” said Z Energy CEO Mike Bennetts.
Z Energy currently owns and operates a network of more than 200 service stations. Chevron operates around 150 Caltex stations and 70 truck fueling stations in New Zealand, as well as lubricant interests.
According to Z Energy, the technical systems cutover is slated to take place on May 31, with the June 1 settlement day being the first day the two companies will operate under common ownership.
A team of more than 100 people from both Z Energy and Chevron New Zealand worked for almost a year on planning and technology solutions to bring the two companies together, to enable them to operate as one from settlement. Until settlement occurs, Z Energy and Chevron New Zealand remain competitors.
“There is a substantial amount of work to be completed in order to fully integrate CNZ’s business into Z’s corporate structure and business operations,” said Bennetts.
Once the acquisition is settled, Z Energy said it is confident it remains on track to deliver the NZD 25 million (USD 17 million) to NZD 30 million (USD 20 million) of synergies previously identified as a result of the deal.