Regulator pushes out Z's bid to buy Chevron assets to end of April

Friday 18th December 2015

The Commerce Commission has delayed its decision on whether to approve Z Energy's application to buy Chevron New Zealand's service station chains until the end of April, adding about $10 million to the cost of the acquisition.

The regulator yesterday said it has delayed its decision until April 29, pushing out the timeline which would have seen an announcement today. The commission had previously flagged an extension was possible given the complexity of the merger, while Z has said any delays past the Nov. 30 cut-over date would cost it about $2 million a month.

"We are still continuing to assess the competition effects of the proposed merger in a number of markets, including the retail supply of petrol and diesel, storage terminals, aviation fuel, bitumen and the supply of diesel to customers who purchase it in bulk or through truck stops," the commission said.

Z wants to buy the Caltex and Challenge! branded chains for $785 million, giving it 49 percent of the retail market.

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.

The deal has received Overseas Investment Office approval, and the commission's decision is its final regulatory hurdle.

Z's shares last traded at $6.70, and have climbed 45 percent this year.

BusinessDesk.co.nz

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