Woolworths to sell Australian fuel retail arm

As the retail giant focuses on core activities, suitors line up for Woolworth's fuel business.

Caltex/Woolworths fuel station

Going, going... Image: Commons

The company's petrol division saw sales of around A$5.6bn (US$4.3bn) in 2014/15 from its 520-plus fuel retail outlets. The price tag for the sale of the business is likely to be around A$1.5bn (US$1.15bn).

The sale, which is being handled by financial advisors Morgan Stanley, is part of a wider disposal of non-core divisions of Woolworth's operations and, according to reports, there are already a number of potential suitors lined up.

Top of the list is Caltex, the Australian fuel producer which is currently Woolworth's supplier to its petrol division.  However, BP Australia is also belived to be in the frame, already providing fuel for some 1,400 stations across the continent. Puma Energy, the country's largest independent operator, is also likely to bid.

Shell will be keeping a keen eye on the sale and will be working closely with Woolworth's main rival, Wesfarmers Ltd, which currently operates more than 680 retail outlets braneded as Coles Express.