DCC buys Norwegian Esso chain for €273m
Chief executive says DCC is 'ambitious' to expand footprint
Diversified Irish group DCC has agreed to pay 2.43bn krone (€273m) to buy Esso's retail petrol station network in Norway.
The network is the third-largest in Norway, selling about 20pc of retail volumes.
The acquisition expands DCCs forecourt business and will give it a total of about 1,000 retail petrol stations in Europe once the deal closes. It will also supply fuel to about 2,000 dealer-owned stations.
DCC already owns networks in Sweden, Denmark and France. The FTSE-100 firm is also the largest supplier of home heating oil in the UK, supplies gas in France, distributes electronic equipment and has a waste management arm as well as a healthcare products and services business.
Its shares rose more than 6pc to £68.15 on news of the deal and a strong trading update. Davy Stockbrokers raised its price target for the shares to £80 (€92) from £75 (€87), arguing that DCC's energy division is now positioned as a "preferred acquirer" of retail assets from oil majors in Europe.
Esso's retail petrol station network in Norway includes a national network of 142 company-operated sites, 15 of which are unmanned, and has contracts to supply 108 Esso-branded dealer owned stations. Most of the stations are in the more-populated south.
Since December 2015, the convenience retail element of the company-operated sites has been handled by NorgesGruppen, the largest grocery retailer and wholesaler in Norway, under a long-term agreement.
DCC, whose ceo is Tommy Breen, also bought its forecourt operations in France from Esso.
In 2014, it agreed to pay €106m for 274 unmanned Esso stations there, as well as 48 Esso-branded motorway concessions. Last year, DCC agreed to pay about €40m to buy a Danish fuel business from Aliementation Couche-Tard, which owns Topaz in Ireland. The Danish business included 139 petrol stations, 44 of them unmanned.
In 2013, DCC agreed to buy Qstar, a Swedish unmanned retail petrol station company. Qstar had 305 unmanned retail petrol stations in Sweden and now has more than 400.
Mr Breen said the acquisition of the Norwegian chain is a "material step" in building DCC's petrol station business in Europe and that the firm is "ambitious" regarding continued expansion.
In its interim management statement, DCC said that its group operating profit for the third quarter ended in December was "strongly ahead" of the corresponding period in the prior financial year.
It expects that both its full-year operating profit and adjusted earnings per share will be "significantly ahead" of the prior year and in line with current market consensus.