TIDMDCC
RNS Number : 1627W
DCC PLC
07 February 2017
7 February 2017
DCC Energy agrees to acquire Esso's retail petrol station
network in Norway
DCC plc, the international sales, marketing and business support
services group, announces that DCC Energy has reached agreement
with Esso Norge AS to acquire its retail petrol station network in
Norway for a consideration of NOK 2.43 billion (c. GBP235 million).
The network is the third largest in Norway with approximately 20%1
of retail volumes.
Esso's retail petrol station network in Norway
Esso's retail petrol station network in Norway comprises a
national network of 142 company-operated sites (127 retail service
stations and 15 unmanned stations) and has contracts to supply 108
Esso-branded dealer owned stations (together referred to as "Esso
Retail Norway"). Esso Retail Norway sells c. 600 million litres of
fuel annually. The majority of the stations are in the more
populous south of the country and, of the 142 company-operated
sites, 110 are held freehold, with 32 being leasehold.
As part of the transaction DCC Energy will enter into long term
brand and supply agreements with Esso Norge AS.
Since December 2015, the convenience retail element of the
company-operated sites has been operated by NorgesGruppen, the
largest grocery retailer and wholesaler in Norway, under a long
term agreement. NorgesGruppen have been rolling out their
award-winning "Deli de Luca" retail concept across the network.
Esso Retail Norway will be integrated into DCC Energy's existing
retail IT and operating infrastructure. This infrastructure was
developed during 2015 to enable DCC Energy's integration of the
Esso France retail business and has operated the business
successfully since completion. Importantly, it was designed to be
scalable and facilitate a 'hub and spoke' operating model, where
key pricing, supply and back office functions can be operated
remotely from an operations centre near Dublin, Ireland, enabling
the effective and efficient management of the business in
conjunction with local management teams. From completion DCC Energy
will employ this model for Esso Retail Norway, in conjunction with
the local management team who have driven the successful
development of the network in recent years.
Strategic rationale
DCC Energy's strategy is to be a global leader in the sales and
marketing of fuels and related products and provision of services
to end consumers. DCC Energy has a strong market presence in the
LPG, Retail & Fuelcard and Oil markets and is well positioned
to continue to grow its business organically and through
acquisition.
The acquisition of Esso Retail Norway is in line with this
strategy and DCC Energy's ambition to build a substantial European
retail petrol station business, leveraging its low-cost operating
infrastructure and, where required, partnering with leading retail
operators to manage a convenience retail offering. On completion of
the acquisition, DCC Energy will operate c. 1,000 retail petrol
stations across Europe and supply c. 2,000 dealer-owned
stations.
Transaction details
The total consideration will be NOK 2.43 billion (c. GBP235
million), plus the value of stock in tank at the date of
acquisition, all payable in cash on completion. The acquired
business, which is substantially asset backed, is expected to
generate a return on invested capital employed of approximately 15%
in the first full year of ownership.
The transaction is subject to customary regulatory approvals and
closing conditions, including competition clearance from the
Norwegian Competition Authority, and is expected to complete in the
final calendar quarter of 2017.
Tommy Breen, Chief Executive of DCC plc, said today:
"The acquisition of Esso Retail Norway is another material step
for DCC in building its retail petrol station business in Europe.
From a modest position three years ago, DCC Energy will, following
completion, operate over 1,000 retail petrol stations and is
ambitious to continue this development. The acquisition is
consistent with our aim to operate world-renowned retail fuel
brands and be an excellent partner for oil majors."
For Reference:
Tommy Breen, Chief Executive
Donal Murphy, Managing Director, DCC Energy
Kevin Lucey, Head of Group Finance and Investor Relations
Telephone: +353 1 2799400
Email: investorrelations@dcc.ie
Powerscourt (Media)
Lisa Kavanagh / Victoria Palmer-Moore
Telephone: +44 20 7250 1446
Email: DCC@powerscourtgroup.com
Note:
This announcement contains inside information for the purposes
of Regulation (EU) No. 596/2014 on Market Abuse.
About DCC plc
DCC plc is an international sales, marketing and business
support services group headquartered in Dublin with operations in
Britain, Continental Europe and Ireland. DCC has four divisions -
DCC Energy, DCC Healthcare, DCC Technology and DCC Environmental.
In its last financial year ended 31 March 2016, DCC generated
revenue of GBP10.6 billion and operating profit of GBP300 million.
The DCC Group currently employs approximately 10,500 people in 15
countries. DCC's shares are listed on the London Stock Exchange and
are included in the FTSE All-Share Index and the FTSE 100
Index.
About DCC Energy
DCC Energy is the leading oil and liquefied petroleum gas
("LPG") sales, marketing and distribution business in Europe and
DCC Energy's vision is to be a global leader in the sales,
marketing and distribution of fuels and related products and the
provision of services to energy consumers. DCC Energy operates
through three distinct businesses: LPG, Oil and Retail & Fuel
Card. In LPG, DCC Energy is market leader in Norway and Sweden,
joint market leader in the Netherlands and strong number two in
France, Britain and Ireland. DCC Energy is the market leader in oil
distribution in Britain and Sweden and one of the leading players
in Austria, Denmark and Ireland. In Retail & Fuel Card, DCC
Energy is a leading operator of unmanned petrol stations in Europe
with operations in France, Sweden, Denmark, Britain and Ireland and
is the leading reseller of fuel cards in Britain.
1 Estimate based on Wood MacKenzie market data
This information is provided by RNS
The company news service from the London Stock Exchange
END
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