Caltex Australia aims to expands retail market with potential acquisition

Caltex Australia Ltd. is interested in acquiring Australia’s largest independent fuel supplier and retailer, United Petroleum, according to local news reports, as it switches its focus away from refining to marketing and distribution.
An information memorandum (IM) for United, founded by Avi Silver and Eddie Hirsch more than 30 years ago and valued at up to A$1 billion (US$934.1 million), will be sent to prospective buyers within the next fortnight. A deal could be done by the end of the year, the report said. Caltex is expected to take an IM for the asset.
“We always said that we are looking for opportunities to grow our business, and one of those opportunities is to grow the retail network . . . about 18 months ago we bought a small business called Bailey’s Marine, which was about A$20 million (US$18.6 million) [and] we made an acquisition of a small reseller in Western Australia for A$10 million (US$9.3 million),” according Caltex Australia CEO and Managing Director Julian Segal.
However, there are potential roadblocks to the purchase. When it tried to acquire 302 Mobil service stations for A$300 million (US$280.2 million), the Australian Competition and Consumer Commission (ACCC) ruled that the deal would significantly lessen competition in several fuel markets in the country.
Segal commented to the local press that this potential acquisition is different from the Mobil one.
“These are very safe acquisitions for us and certainly don’t impact the competitive landscape. And if there are opportunities like those in the future we’d certainly be interested.”