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EG Group has agreed a roughly £530mn deal to sell its Australian business in its second disposal in a matter of days, as the petrol forecourt group moves to cut debt ahead of a possible stock market listing in the US.
The UK-based company said on Thursday that it had agreed to sell the Australian division — which spans more than 500 sites — to petroleum company Ampol at an enterprise value of A$1.1bn (£529mn).
The consideration will be paid via A$850mn in cash and A$250mn of Ampol shares.
The deal comes days after EG Group agreed to sell its Italian arm to a consortium of domestic forecourt operators for an enterprise value of €425mn.
EG, led by new chief executive Russ Colaco, said the disposals would help it focus on “core market operations, strengthen its balance sheet and reduce leverage”.
The group’s net debt now stands at $5.3bn, equivalent to almost five times last year’s adjusted earnings. It is 50 per cent owned by London-based buyout group TDR, with the remainder split between the Issa brothers, Mohsin and Zuber, who co-founded the business in 2001.
EG’s owners embarked on a debt-fuelled acquisition spree during the low interest rate era, a period of rapid growth that is now being unwound as higher interest rates place a strain on its finances.
The group, which employs about 38,000 staff and has more than 5,500 sites, has been preparing for an IPO in the US for several months, in a move that would pave the way for TDR to begin exiting its investment, potentially around the middle of next year.
However, co-founder Zuber Issa recently told the Financial Times that the petrol station group should explore a sale of its $5bn-plus US business instead to reduce debt.
“There are people who want to buy the US assets,” he said in an interview. “It will be an auction process which would get to a clear end goal much quicker [than an IPO] and we can pay the debt off.”
The comments were a rare public intervention from Zuber, suggesting a divergence of opinion with TDR on the best way to exit what has been a highly successful investment.
EG’s Australian division generated adjusted earnings before interest, tax, depreciation and amortisation of $99mn in 2024. Revenues fell by 7 per cent to $2.79bn over the same period.
Ampol, which is listed in Sydney, supplies fuel to Australia’s largest branded petrol and convenience store chain.
