BP's Plan To Buy Woolworth's Petrol Stations Rejected By ACCC
Zacks Investment Research | Dec 13, 2017 09:55PM ET
The Australian Competition and Consumer Commission (“ACCC”) has decided against the proposed acquisition of Woolworth’s petrol stations by BP (LON:BP) Plc (NYSE:BP) , per Reuters.
The ACCC believes that the $1.4-billion worth purchase, will curb competition significantly in the retail fuel market. With reduced competition, motorists will have to pay higher prices for fuel at Woolworth stations, said the Australian watchdog. The latest offer by BP to divest few stations for addressing ACCC’s concern has also been rejected. BP is disappointed and is in talks with lawyers to challenge the ACCC decision, the source revealed.
Caltex Australia Ltd, a leading supplier of fuel in Australia, will likely gain from the ACCC verdict. Per the source, Caltex was about to sacrifice its contract with Woolworth for supplying fuel. This could hurt the fuel supplier’s projected 2017 earnings.
London-based BP is among the leading integrated energy players in the world. The stock has rallied 8.7% year to date, outperforming the 5.2% gain of the Original post
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