Some small town petrol stations may have to be sold individually if another oil company ends up buying Shell’s downstream businesses in New Zealand, a competition expert says.
Shell New Zealand, owned by oil giant Royal Dutch Shell, is looking to sell 230 petrol stations, and its holdings in Flybuys and the New Zealand Refining Company. It will keep its 36% stake in construction company Fulton and Hogan.
While there is unlikely to be any competition hurdles for potential buyers in relation to the refinery stake or the Flybuys loyalty programme, the Commerce Commission could take an interest in the retail petrol station assets.
Bell Gully competition lawyer Phil Taylor says that if another oil company, BP for example, is the preferred bidder then some petrol stations might have to be divested elsewhere.
“In certain areas divestments may have to be made where there is accumulation of market power.”
Any petrol stations that might fit into this category could be on sold to individual owners under a franchise model, or to one of the other suppliers, he says.
Trade buyers including Shell’s main competitors are thought to be the most likely buyers.
Royal Dutch Shell, which last month posted its first quarterly loss on 10 years – $US2.8 billion – has employed investment bank UBS to start the sales process.
A list of interested parties is expected to be compiled by early August.
This article is tagged with the following keywords. Find out more about MyNBR Tags