Z Energy Ltd. agreed to buy Chevron Corp.’s gas stations in New Zealand for NZ$785 million ($558 million), cementing its place as the nation’s biggest gasoline retailer. The shares surged.
Z Energy will seek about NZ$185 million from shareholders later this year to help pay for the assets, and is raising an extra NZ$540 million from its bankers, the Wellington-based company said Tuesday. The transaction, which requires regulatory approval, will boost earnings immediately and deliver as much as NZ$25 million a year in savings from 2017, it said.
Z Energy will add Chevron’s 146 Caltex retail outlets to its existing 210 sites, which were acquired in 2010 when the company took over assets from Royal Dutch Shell. It also will grow its share of supply to commercial operators and its role in distribution.
“The New Zealand transport fuels market is and will remain highly competitive,” Z Energy Chief Executive Officer Mike Bennetts said in a statement. “Z and Caltex are only two players in a very dynamic marketplace in which there are currently five importers of refined fuel and crude oil and where motorists have the choice of at least a dozen fuel retailers.”
Z Energy shares surged 13 percent to NZ$5.75 in early Wellington trading today.
Chevron, which sold a 50 percent stake in Caltex Australia in March, last week divested an 11 percent stake in New Zealand Refining Co.