Essar arm to buy UK fuel retailer for nearly $550 million
NEW DELHI: Essar Energy Transition’s retail arm has agreed to acquire independent UK forecourt operator SGN Retail in a deal estimated at about 400 million pounds ($540 million or Rs 5,166 crore), adding 118 sites to its network and creating a 235-site estate as it seeks to build a vertically integrated fuel business in Britain.EET Retail, the retail division of Essar Energy Transition Fuels, in a statement said it had agreed to acquire 100% of SGN Retail, which was founded by Graham Peacock and Susan Tobbell.While the company did not disclose the financial details, sources said the deal is estimated to be about 400 million pounds. The deal will give EET Retail annual fuel throughput of more than 650 million litres, combining SGN Retail’s 118 locations with the 117 sites already operated by EET Retail.EET Retail said the enlarged network would make it the UK’s second-largest forecourt operator with direct integration into fuel production. It plans to expand the network to about 800 sites by 2031, equivalent to roughly 9% of the UK market, with fuel supplied by Essar’s Stanlow refinery in Cheshire.“Building a scaled, vertically integrated retail forecourt platform is a critical pillar of our long-term UK strategy. SGN Retail is one of the highest-quality forecourt networks in the UK well ahead of the market. This acquisition accelerates our plan to build a nationwide, vertically integrated platform of 800 sites, backed by direct refinery supply and delivering competitive prices at the pump for UK motorists,” said Arvan Ruia, CEO of EET Retail.The acquisition comes as EET seeks to reconnect fuel production with retail distribution, arguing that the UK’s fuel market has become increasingly fragmented over the past two decades as oil majors reduced investment in domestic refining.EET said the model would allow fuel refined at Stanlow to be distributed more directly to its own forecourts, reducing reliance on imports and multiple layers in the domestic supply chain. “This is a unique, best-in-class opportunity and advances a core part of our M&A strategy. The transaction is backed by a top-tier group of banks spanning four continents, several supporting the UK forecourt sector for the first time, underscoring confidence in our backward-integrated growth model and in the UK fuels and convenience markets,” said Viral Gathani, head of strategic transactions at Essar Energy Transition (EET).The transaction is being financed through a combination of cash and a new 250 million pound senior debt facility arranged by First Abu Dhabi Bank, Macquarie Bank, Mizrahi Tefahot Bank, Natixis, OakNorth Bank, Royal Bank of Canada, and others. Agencies
