Woolworths Group has entered into a wholesale food supply agreement, which will offer customers a greater product range and competitive pricing.
The company announced this on November 9, along with an agreement to sell its 540 Woolworths-owned fuel convenience sites to EG Group for $1.725 billion.
The EG Group is a global competitor in fuel and convenience retailing, operating about 4,700 sites across Europe and North America and employing more than 28,000 people.
As part of the transaction, Woolworths Group and EG Group have entered into a 15-year commercial alliance covering fuel discount redemption, loyalty and wholesale product supply.
Key features of the alliance include a greater product range in the food sector, the continuation of Woolworths’ four cent per litre fuel discount and the continuation of Woolworths Rewards points on fuel and merchandise.
Woolworths Group CEO Brad Banducci said the transaction is a positive for the company’s customers, its team and its shareholders.
“The agreement will continue to strengthen the opportunities our customers have for greater value when shopping with us, with the benefits of the Woolworths Rewards program and the fuel discount offer set to continue.
“A long-term wholesale food supply arrangement will also ensure that EG Group can benefit from competitive product sourcing, including Woolworths’ own brands, to provide a world class convenience offer that will add further scale to Woolworths FoodCo,” said Banducci.
All existing Woolworths Petrol management and operations teams will transfer to EG Group following completion of the sale.
EG Group founder and co-CEO Mohsin Issa said for the past 17 years, the company had a vision of becoming a leading petrol station and convenience store operator around the world.
“The Woolworths’ assets present a fantastic opportunity to further grow our international footprint and deliver our best-in-class retail experience in a new geography.
“We are committed to investing in the site network, introducing leading retail brands, developing the alliance with Woolworths and working with the exceptional management team,” said Issa.
The transaction is subject to Foreign Investment Review Board approval. Completion is expected to occur in early 2019.