DCC acquires Total assets in €67m deal
Diversified group DCC has agreed to pay €67m to extend its footprint in the UK by buying assets belonging to French oil giant Total.
DCC said it had reached a conditional agreement with Rontec Investments -- a consortium led by British property mogul Gerald Ronson that earlier this year inked a deal to buy 810 service stations from Total -- to acquire a number of fuel distribution assets that were under the Total umbrella.
Those assets are based in Britain, the Channel Islands and the Isle of Man. DCC said the acquired business sold 1.5 billion litres of fuel in 2010.
It includes a transport, commercial and home-heating oil distribution business with sales volumes of about 670 million litres with a fleet of 200 delivery trucks.
The newly bought business also has contracts to supply about 300 dealers currently operating Total-branded petrol stations. DCC has also acquired all of Total's oil distribution and retail service station businesses in the Isle of Man and the Channel Islands.
DCC chief executive Tommy Breen described the acquisition, which is expected to close by the end of the year, as a "further significant step" in DCC's strategy in Britain.
Davy Stockbrokers said the deal was a good one for DCC and that it was surprised the asking price wasn't higher.
DCC is already the single biggest supplier of home-heating oil in the UK.
Rontec Investments bought 810 service stations from Total for £350m (€401m) under the contract signed in June, and agreed to immediately sell 254 of them to Shell for £240m. Rontec will operate all the stations it retains. The other members of the Rontec consortium include Investec and private equity outfit Grovepoint.
Mr Ronson was an early pioneer of forecourt retailing in the UK before later becoming known as a major property investor.
Earlier this month, the UK's Office of Fair Trading said that DCC had not been transparent in informing customers of its connection to a home-heating oil price comparison website. DCC owns the website, and had drawn significant media attention during the year following complaints by consumers. DCC gave an undertaking to OFT that it wouldn't engage in any practices that could be misleading to consumers.