Z Energy Receives Commerce Commission Approval to Buy Chevron New Zealand
April 28 2016 - 5:54PM
Dow Jones News
By Kate Geenty
WELLINGTON, New Zealand--Gas station operator Z Energy has
received approval from the New Zealand Commerce Commission to buy
Chevron New Zealand, the owner of the Caltex and Challenge brands
in New Zealand.
The Commerce Commission's clearance for the 785 million New
Zealand dollar (US$546 million) deal to go ahead is conditional on
Z Energy selling 19 retail sites and one truck stop, which are in
locations where the Commission considers competition would be
substantially reduced as a result of the deal.
Z Energy Chief Executive Mike Bennetts said Z Energy would need
some time to assess the financial effect of the required
divestments and said there are options as to which gas stations are
sold. "The volume impact on the combined company ranges between
60-80 million liters per annum. Over the past 11 months, Z has had
approaches from numerous parties expressing interest in any assets
that may be divested so Z expects competition for these assets," he
said.
The Commission said it analyzed the competitive effect of the
proposed deal on the supply of fuel to retail and commercial
customers and also how it would affect upstream markets associated
with refinery, distribution and storage infrastructure.
Commerce Commission Chairman Mark Berry said Chevron had been a
passive competitor in New Zealand and had followed the lead of its
rivals rather than taking an aggressive approach in pricing. "We
consider, by majority, that subject to Z Energy divesting 19 retail
sites, Chevron's absence would not make a material difference to
the competitive dynamics we currently see, where retail price
movements are dominated by Z, BP, Mobil and Gull," Mr. Berry
said.
Settlement is expected on June 1. Z Energy expects synergies of
between NZ$25 million to NZ$340 million from the acquisition, from
improved supply chain efficiency, reduced people costs and a range
of IT, systems and process efficiencies.
Write to Kate Geenty at kate.geenty@wsj.com.
(END) Dow Jones Newswires
April 28, 2016 17:39 ET (21:39 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Chevron (NYSE:CVX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Chevron (NYSE:CVX)
Historical Stock Chart
From Sep 2023 to Sep 2024