Z Energy to purchase Chevron’s downstream business in New Zealand
Wellington, New Zealand-based Z Energy Ltd. announced today that it has agreed to acquire 100% of Chevron New Zealand, subject to regulatory approval, for NZD 785 million (USD 557 million).
The transaction includes all Chevron-owned service stations and lubricants business. Chevron New Zealand has 146 retail sites operating under the Caltex and Challenge brands. Z Energy currently has 210 retail sites. Chevron also owns seven terminals and three joint venture terminals with a total capacity of 98 million liters, whereas Z Energy has seven terminals and four joint venture terminals with a total capacity of 146 million liters.
The proposed acquisition excludes Chevron’s upstream interests. Last week, Chevron New Zealand sold its 11.368% stake in Refining NZ to institutional investors, in a separate deal worth NZD 82 million (58 million).
Z Energy CEO Mike Bennetts said the acquisition was a major opportunity for the company.
“The New Zealand transport fuels market is and will remain highly competitive,” he said. “As New Zealanders know, Z and Caltex are only two players in a very dynamic marketplace in which there are currently five importers of refined fuel and crude oil and where motorists have the choice of at least a dozen fuel retailers.”
Bennetts said Z will operate the two brands throughout the combined service station network.
“The acquisition is also a great fit with our longer term market growth strategy. Caltex is a successful and highly attractive business in New Zealand and the acquisition means we can use the scale of the combined operation for the expanded supply of biodiesel to a broader market.”
The transaction will be financed through a combination of existing cash, committed term debt and standby facilities, together with an expected underwritten pro rata equity raising which will occur closer to settlement. The target settlement date is 30 November 2015.
Z was advised by Goldman Sachs New Zealand Limited, together with Minter Ellison Rudd Watts, Chapman Tripp and PwC.