Mobil Oil Australia Pty Ltd has successfully completed a deal with 7-Eleven’s Australian owners to transfer ownership of 295 Mobil branded service stations across to 7-Eleven Stores Pty Ltd.
Mobil’s decision to sell to 7-Eleven comes after a failed takeover bid by Caltex last year that was rejected by the ACCC after concerns were raised over the lessening of competition in the fuel retail market. 7-Eleven as a result was able to pick up the 295 company-owned or leased service stations from Mobil for a much lower price than the failed $300 million Caltex bid. (Update: The Age reports the sale was rumoured to be for a similar $300 million figure)
The Mobil fuel outlets are located primarily in the metropolitan areas of eastern Australia, strengthening 7-Eleven’s presence along the east coast which the company already has a weak, but growing franchise model with franchises available from $300,000 – $800,000. On the completion of the deal 7-Eleven will be the 3rd largest private company operating in Australia.
Chairman of 7-Eleven in Australia, Russell Withers said this deal solidified 7-Eleven’s presence in the convenience store market.
“This deal with Mobil will build on 7-Eleven’s position as the leader in the convenience retailing industry in Australia, taking the number of 7-Eleven stores from 400 to more than 650.”
“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.
7-Eleven Chief Executive Officer, Warren Wilmot expects the stores to perform better once the transition to 7-Eleven branding is complete.
“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.
Mobil outlets in South Australia (30 in total) are expected to be on-sold to the Peregrine Corporation, a family-owned business that has been operating in Australia for 26 years, and shares 7-Eleven’s approach to its business and its people. Peregrine Corporation plans to re-brand the Mobil stores as “On the Run” outlets bringing the total number of stores in the chain to 81, The Advertiser reports.