Canadian convenience store operator Alimentation Couche-Tard has made a takeover offer for Caltex Australia, one of Australias biggest lubricant and grease suppliers, the latter announced this week.
Though the A$8.6 billion (U.S. $5.8 billion) offer is for the entirety of the supplier, Couche-Tard could sell Caltex Australias lubes and grease segment. The Canadian company does not operate any lube blending facilities.
Caltex owns more than 250 fuel and retail outlets in Australia, while Couche-Tard operates around 16,000 retail stores globally and has been expanding its convenience store network into the United States, Europe and Asia.
Caltex is the brand name and the licensee for Chevron products in Australia, including refined fuels and lubricants. Chevron sold its 50 percent stake in Caltex Australia in 2015.
Shortly afterwards, Caltex broke up with BP Australia, dissolving a 15-year lubricant blending joint venture known as Australian Lubricant Manufacturing Co., which held around half of Australias lubricant and grease market and was valued at nearly A$2 billion.
After the split, Caltex retained a blending plant and base oil storage facility at Lytton in Brisbane as its home base for lubricants and grease in Australia. It also has distribution and warehousing facilities throughout the country in Sydney, Melbourne and Perth.
IBISWorld market research group earlier this year ranked Caltex among the countrys top five lubricant suppliers. Caltex-branded lubricants include Delo, Havoline and Ursa. Caltex grease brands include Liplex. According to the companys website, it has storage for 19 million liters (17,000 metric tons) of base oil at Lytton and capacity to produce 120,000 kiloliters per year of finished lubes.
The latest bid was confirmed by Caltex in a statement to the Australian Stock Exchange just a day after Caltex announced an initial public share offer for 49 percent of a retail property portfolio. Caltex described the Couche-Tard bid as unsolicited and said it is conditional on Caltex not proceeding with the IPO.
ACT’s management team has been looking into the Asia-Pacific region for several years as a potential market for our continued growth, and we see many opportunities, Couche-Tard President and CEO Brian Hannasch said in a statement. With Caltex, we see a potential opportunity to leverage our leading global position in the convenience retail market, and we would seek to bring all our operating expertise to bear to help support and grow the Caltex business.
The Australian Financial Review reported sources close to Couche-Tard had been testing the market for bid partners who could take the fuels and lubricants assets.
Caltex Australia declined to respond to questions from Lube Report. Couche-Tard did not respond to inquiries in time for publication.