Ampol announced plans to acquire EG Australia in August last year, subject to regulatory approval which has now hit a hurdle. (Source: EG Australia)
Fuel giant Ampol’s $1.1 billion takeover of the EG Australia service station network has hit a snag with the competition watchdog. The petrol stations reached an agreement in August for Ampol to acquire more than 500 service stations from the British-owned company.
But the Australian Competition and Consumer Commission (ACCC) has now raised concerns the acquisition could “substantially lessen competition” in the petrol and diesel space in several markets. As a result, it has decided not to approve the acquisition in its phase 1 assessment and will instead move to a phase 2 review.
“The acquisition would combine two major fuel retailers in Australia,” ACCC Commissioner Dr Philip Williams said.
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“We have identified 115 EG sites where the acquisition could substantially lessen competition in the relevant local market, and also consider that the acquisition could substantially lessen competition in the metropolitan areas of Brisbane, Canberra, Melbourne and Sydney.”
Ampol, which has around 1,800 branded sites nationally, offered to divest 19 retail fuel sites to address competition concerns from the proposed acquisition.
However, the ACCC argued this did not adequately address the issue, so it has decided to conduct the further in-depth competition assessment.
No decision has been reached yet.
Ampol said the decision was consistent with the new merger control regime process, which allowed for a second phase if the consumer watchdog concluded competition issues “could” arise.
“Ampol remains confident in its position and will continue to work constructively with the ACCC during this phase,” Ampol said in a statement to the ASX.
“The transaction remains on track for anticipated completion in mid-2026 with the Phase 2 assessment taking up to 90 business days (unless extended).”
Ampol, formerly Caltex Australia, is one of the country’s biggest petrol and diesel businesses.
The acquisition is set to put its presence on par with its main rival Viva Energy.
EG paid $1.73 billion to enter the Australian fuel market in 2019, acquiring 540 Woolworths-owned service stations.
Customers can still earn Woolworths reward points on fuel and purchases across the network.
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