Z Energy expects greater benefits than previously forecast from its proposed acquisition of Chevron New Zealand’s service stations
In a statement released online to investors yesterday, Z Energy says it is running on schedule to integrate the business if it gets approval from the antitrust regulator.
It sees annual savings of between $25 million and $30 million from acquiring the Chevron assets, up from earlier estimates of $15 million to $25 million, according to the online statement.
Z Energy also lowered the forecast cost of acquiring the Caltex and Challenge service stations to $55 million from $64 million.
It also says in the online statement that any delay in the November 30 cut-over date would add an extra $2 million a month.
“It would appear to us that Chevron has benefited from a strengthened operating performance during calendar 2015,” says Z chief executive Mike Bennetts.
“Accordingly, Z now expects that the financial performance of Chevron is stronger than our initial assessment at the time of announcing the proposed acquisition.”
The acquisition is currently in the hands of the Commerce Commission, which is reviewing whether Z’s $785 million acquisition of Chevron, giving it 49% of the retail market, would substantially lessen competition.
BusinessDesk reports that rival Mobil Oil New Zealand has submitted the merger would concentrate fuel discount arrangements while discount retailer Gull New Zealand was concerned over the long-term commercial contracts the enlarged group would be able to command.
BP New Zealand warned competition issues would arise in more areas than claimed and recommended Z be forced to divest stations in those locations.
Z Energy says the process is proceeding as planned, and was confident the transaction won’t substantially lessen competition. The regulator has indicated it will make a decision on Dec. 18
