Z rival says acquisition could affect fuel market

Z will end up with a 49 per cent share of the fuel market if the $785 million sale, which requires the competition regulator's approval, goes ahead. Photo / NZME.

The boss of a Z Energy rival says its planned acquisition of Caltex operator Chevron NZ could impact competition in the fuel market.

But Dave Bodger, general manager of the Gull service station chain, says he expects the Commerce Commission to conduct a thorough assessment of the deal.

Z will end up with a 49 per cent share of the fuel market if the $785 million sale, which requires the competition regulator's approval, goes ahead.

Bodger said his firm was assessing the potential impact of the acquisition.

He noted that Z had indicated it could divest assets included in the acquisition if the commission requires that, which could improve competition in some regions.

However, there was still potential for competition to be lessened.

"The 49 per cent [market share] is something that sticks itself up as a flag and says the authorities need to look at it," Bodger said.

He said Gull, which operates more than 60 stations and has a roughly 6 per cent market share, may make a submission to the commission on the acquisition.

Z already has 210 service stations and 92 truck stops, while Chevron NZ has 146 Caltex and Challenge service stations as well as 73 truck-filling sites.

The purchase, which also requires Overseas Investment Office approval, includes a two-million-barrel oil inventory, 10 terminal assets and Caltex's lubricants business.

It will be funded by existing cash, debt and a $185 million pro rata capital raising that Z intends to carry out after it has received the commission's clearance.

Z shares closed at $5.93 on Friday, below the record $6.20 they reached following last week's news of the Chevron deal.

The firm is aiming to settle the purchase by November 30.