Royal Dutch Shell PLC is selling its century-old distribution and retail business in New Zealand, including hundreds of gas stations and a share in the country's only oil refinery, for 696 million New Zealand dollars ($490 million). Europe's largest oil company said Monday the assets will be sold to New Zealand infrastructure investor Infratil Ltd. and the Guardians of New Zealand Superannuation, as part of its plan to reduce its exposure to refining and focus on growth markets.
Infratil Ltd. said the agreement, scheduled to be completed Thursday, is conditional on the drawdown of bank facilities, which have been signed, and finalizing certain third-party consents. The base purchase price was $490 million plus an adjustment for actual net working capital in excess of $146 million at settlement date. In addition to an extensive retail network and commercial customer base, the purchase involves nationwide distribution, storage, marine and aviation assets, rights to use Shell's retail brand and the ongoing supply of Shell fuels and products.
Shell's decision to sell because of changes in the global oil market had presented a "once in a generation" opportunity, Infratil managing director Marko Bogoievski said. "The goal from here is to continue to provide high-quality fuels at competitive prices and to leverage the benefits of a New Zealand-owned and managed downstream business," he said in a statement. Until now, minor energy supplier Challenge has been the only locally-owned fuel provider in a market dominated by transnational groups.