DCC is on the hunt to buy more European chains of unmanned fuel stations, following its announcement yesterday it has agreed a €106 million deal to buy assets from Esso in France. It is the Irish company's biggest acquisition.
The Irish fuels-to-healthcare-to-technology conglomerate will acquire 274 unmanned Esso Express stations; 48 motorway Esso service station concessions; and contracts to supply fuel to a further 75 service stations. DCC will also enter into a long-term branded supply agreement with Esso’s French arm.
The assets DCC will acquire, once the deal closes next year, have revenues of €2.2 billion, and generate operating profits of €15-€16 million. The deal is subject to consultation with workers' councils and competition clearance from the European Commission.
Market share
At a stroke, DCC will gain a 4.2 per cent share of the French retail motor fuels market with the Esso Express deal. The motorway concessions, the operation of which is outsourced, will give it 8 per cent of that market, although DCC says it may invest in more such concessions.
The deal represents DCC's second major foray into unmanned stations, where customers pump their own fuel having prepaid with a credit or debit card onsite. In January, the Dublin-headquartered, London-listed company agreed to buy Qstar in Sweden, a £40 million chain of more than 300 stations.
Speaking to The Irish Times following the announcement, DCC's chief executive, Tommy Breen, said the company is "absolutely" looking to strike further similar deals with oil majors that may be deleveraging their European assets. It is also seeking to buy liquid petroleum gas assets.
Downstream assets
“Over the last few years, we have built up relationships with majors like
Total
,
Chevron
,
Exxon Mobil
,
Shell
. It appears the majors will continue to divest downstream assets. Hope fully we can get opportunities from that,” he said.
Mr Breen declined to say if it was close to striking any more deals. “We continue to have good conversations with all of them. Hopefully, we are regarded as good partners. If any of these type of assets came on to the market and we were not contacted, we would be disappointed,” he said.
The deal is DCC’s first acquisition in France by its energy division – its technology division has operated there since 2000. Mr Breen said it will use the Esso transaction to expand in the country through bolt-on acquisitions and organic growth. “But most European markets hold some interest for us,” he said.
Unmanned fuel stations are common on the continent. DCC has said there is “some scope” in Britain, but there is only one in Ireland, a DCC operation near Dublin Airport.
