Caltex Australia will rebrand to Ampol over the next three years.

The announcement comes after the company said it had received a termination notice from Chevron Corporation regarding its current licence agreement for use of the Caltex brand in Australia.

According to Caltex Australia, 18 months of discussions had taken place with Chevron regarding the future of the licence agreement, and that agreement provides for a three-year transition period consisting of a six-month notice period and 30-month work out period. Caltex has continued exclusive use of the Caltex brand for the notice period and first 18 months of the work out period.

The decision to rebrand to Ampol was taken, the company says, following a detailed brand review and will see the Ampol name return to Aussie service after being retired when, in 1997, and following Ampol merging with Caltex, the company became Caltex Petroleum Australia.

Managing Director and CEO of Caltex, Julian Segal, said the change to the Ampol brand better reflects the organisation’s Australian history, independent operations and position as the country’s leading transport fuels provider.

“Ampol is an iconic brand in Australia and reflects our deep Australian heritage and expertise,” said Mr Segal in a statement. “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.

“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 company says the branding transition will involve some additional marketing operating costs to relaunch the brand but will ultimately deliver cost savings from the removal of annual trademark licence fees of between $18 million and $20 million. The cost of the rebrand is estimated to be about $165 million over a three-year period.

The move comes at an interesting time for Caltex Australia – the company is an acquisition target of Canadian convenience store and petrol station behemoth Couche-Tard, which launched a bid for the company in 2019. At the time, Caltex Australia announced that its Board had concluded that the Couche-Tard proposal (reportedly worth more than $8 billion) ‘undervalues the Company and does not represent compelling value for Caltex’s shareholders’. However, they had offered to provide the Canadian outfit with selected non-public information to allow it to formulate a revised proposal.
In related news, while Chevron cut its ties with Caltex Australia, the U.S. petrol giant immediately leapt back into the thick of the Australian petroleum action with an announcement that it had signed a conditional Share Sale Agreement with Puma Energy Asia Pacific to acquire all shares and equity interests of Puma Energy (Australia) Holdings Pty Ltd for $425 million.

Puma Energy (Australia) Holdings Pty Ltd and its subsidiaries hold assets that include a network of 270 company-owned and retailer-owned service stations in Australia, a commercial and industrial fuels business, and owns or leases seaboard import terminals and fuel distribution depots. The Puma Energy bitumen business in Australia is not impacted by this transaction.

What does Chevron’s move mean? Well, perhaps the Caltex name won’t disappear from Australia for very long if it chooses to rebrand their Puma Energy purchase.

“The acquisition will provide Chevron with a stable market for production volumes from our refining joint ventures in Asia and create a foundation for sustainable earnings growth,” said Mark Nelson, Chevron’s executive vice president for Downstream & Chemicals. “It will build on Chevron’s strong history of partnership in Australia and our global experience in fuels and convenience marketing and supply.”

The acquisition of Puma Energy (Australia) Holdings Pty Ltd is expected to close in mid-2020.

Source: Motor Trader E-Magazine (Feb 2020)

10 Feb 2020