Mobil stores are free to be rebranded as 7-Eleven outlets after the ACCC gave the acquisition of Mobil by 7-Eleven approval to proceed, concluding it would not impact competition negatively.
Mobil’s decision to sell to 7-Eleven came after a big by rival Caltex worth $300 million was rejected by the Australian Competition and Consumer Commission (ACCC) who feared the acquisition would substantially lessen competition amongst fuel retailers and lead to higher prices for consumers.
7-Eleven is now free to continue the integration of the 295 Mobil stores, with the exception of a compulsory divestment of three stores which the ACCC mandated in its decision. In addition, due to 7-Eleven not operating in South Australia the 29 Mobile branded service stations in that state will be on-sold to South Australian family owned business the Peregrine Corporation, who have been operating in the state for 26 years.
7-Eleven Chief Executive Officer, Warren Wilmot welcomed the decision from the ACCC, saying the acquisition would allow 7-Eleven continue to build on its existing position as the leader in convenience retailing in Australia, and provide some certainty to the management and employees of the stores involved.
“We are very pleased to be able to move forward with this acquisition for 7-Eleven. We will now grow in Australia from 400 stores to more than 650, serving more than 160 million customers each year.
“While we would prefer not to divest stores, we will abide by the ACCC’s decision, which has been arrived at with professionalism and diligence,” Wilmot said.”
The Mobil fuel outlets being acquired by 7-Eleven are located primarily in the metropolitan areas of New South Wales and Victoria, strengthening 7-Eleven’s presence along the east coast. 7-Eleven will look to offload some of the Mobil locations acquired through the deal to franchisees, with franchises available from $300,000 – $800,000.
“We expect to convert most of the Mobil sites into 7-Eleven stores by the end of 2011, with sites being significantly upgraded. This is also great news for our existing franchisees as it will bring supply chain efficiencies and greater buying and marketing power for 7-Eleven.” said Mr Wilmot.
Chairman of 7-Eleven in Australia, Russell Withers said this deal solidified 7-Eleven’s presence in the convenience store market.
“As a family-owned business that has been operating 7-Eleven in Australia for 33 years, we are very excited about this acquisition and welcome the Mobil metropolitan retail fuels business and its employees into our group.” he said.