BP (LON:BP) has suffered a setback Down Under, with the Australian competition watchdog opposing the energy group’s acquisition of Woolworths’ network of retail service station sites. The FTSE 100 energy major meanwhile noted that it is considering its options.
BP’s share price has fallen marginally lower in London this morning, having given up 0.22 percent to 504.30p as of 10:37 GMT, largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.25 percent lower at 7,477.96 points. The group’s shares have added nearly five percent to their value this year, as compared with about a 7.5-percent rise in the Footsie.
Setback Down Under
The Australian Competition and Consumer Commission (ACCC) announced in a statement today that it intended to oppose the proposed acquisition by BP’s local unit Woolworths network of retail service station sites. The acquisition was announced about a year ago.
“We consider that BP acquiring Woolworths’ service stations will be likely to substantially lessen competition in the retail supply of fuel,” ACCC Chairman Rod Sims said in the statement, adding that BP’s prices were ‘significantly higher’ on average than Woolworths and that the UK group generally increased prices faster.
Reuters noted in its coverage of the news that investors had said that the rejection was not a total surprise, given the regulator had flagged concerns about the deal earlier this year.
“I don’t think it’s significant for Woolworths,” said Stephen Bruce, a portfolio manager at Perennial Value Management, an investor in Woolworths, told the newswire.
The UK group’s Australian unit said in a statement that it was disappointed, and that it was consulting its lawyers to determine its next steps.