Sunday, December 22, 2019

Caltex to become Ampol after Chevron negotiations fail

Well-known Australian oil company brand Ampol is set to return to bowsers across the country, with fuel and service station giant Caltex Australia revealing plans for a major branding update.

The ASX-listed company announced on Monday it would be changing its name to Ampol following the breakdown of negotiations with US oil giant Chevron, from which Caltex Australia had licensed its name.

Caltex is set to become Ampol after licensing negotiations with former shareholder Chevron failed.Credit:Sasha Woolley

Chevron, a former major shareholder in Caltex, owns the rights to the brand, which it licenses out to operators in countries around the world. Chevron sold its 50 per cent stake in Caltex Australia four years ago for $4.62 billion.

Caltex Australia informed shareholders it had received a termination notice from Chevron following 18 months of negotiations, with the two companies unable to come to an agreement over the licensing.

The news follows Chevron's announcement last week of a $425 million deal to take over Puma Energy’s Australian fuel and service station business, which includes 360 service stations the US company may intend to brand under the Caltex name.

Caltex Australia will retain rights to the name for the following three years, during which it will begin a transition to Ampol across its network, which it estimates will cost a total of $165 million.

The iconic Ampol name is set to return to petrol bowsers across the country.Credit:Glenn Campbell

However, the company has also flagged between $18 to $20 million in annual cost savings due to the removal of annual trademark license fees paid to Chevron.

Ampol was a historic Australian fuel business, founded in 1936 and originally known as the Australian Motorists Petrol Company. It was acquired by major fuel retailer Pioneer in 1988 before merging with Caltex Australia in 1995.

Caltex Australia chief executive Julian Segal said the company was excited to bring back a brand with a "proud Australian history".

"Ampol is an iconic brand in Australia and reflects our deep Australian heritage and expertise. Our market research confirms that Ampol continues to be regarded as a high-quality and trusted brand by Australian consumers and resonates across our key customer segments," he said.

"The transition to Ampol also supports our evolution into a growing regional fuels and convenience business and will allow us to invest and build equity in a company-owned brand as we continue the rollout of our retail strategy. This includes capturing benefits from cost synergies of rebranding during the rollout."

The name change is the latest in a line of significant changes for the fuel retailer, which recently announced plans to spin-off a 50 per cent stake in 250 service stations across the country to create a $1.1 billion listed property trust.

Additionally, the company is currently navigating a $34.50-a-share offer, worth some $8.6 billion, from Canadian convenience store operator Couche-Tard. Caltex Australia is currently waiting on a revised bid from Couche-Tard after saying its original tilt "undervalued" the company.

Caltex Australia shareholders will be asked to approve the name change at the company's annual general meeting in May next year.

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