Stanlow, UK, September 14 (Daily Kiran) : Essar Energy Transition Fuels (EET Fuels) has announced the acquisition of SGN Retail, a leading independent fuel forecourt operator in the UK. This strategic move involves the purchase of 100% of SGN Retail, adding 118 new fuel stations to EET Retail’s existing network.
With this acquisition, EET Retail will now operate a total of 235 fuel stations across the country, combining its 117 existing sites with the new ones from SGN Retail. The expanded network is expected to have an annual fuel supply capacity exceeding 65 million liters, positioning EET Retail as the second-largest backward-integrated forecourt operator in the UK.
EET Retail and its parent company, Essar Energy Transition, aim to create an integrated model in the UK that controls the entire supply chain from fuel production to the end consumer. The company highlights that the UK fuel market has become increasingly fragmented over the past two decades, with major oil companies reducing investments in domestic refining. This has complicated the supply chain and increased reliance on imports. Essar Group plans to simplify this system by developing a “refinery-to-pump” model.
The Stanlow refinery, part of Essar, already produces about 20% of the UK’s road transport fuel needs. The refined fuel will now be delivered directly to EET Retail’s forecourt network.
The acquisition of SGN Retail is expected to accelerate EET Retail’s long-term expansion strategy, with a goal of establishing a network of 800 forecourts by 2031. This would represent nearly 9% of the UK forecourt market share. The company believes that population growth, an increasing number of households with multiple vehicles, and a declining number of fuel stations make this sector an attractive investment opportunity.
EET Retail asserts that direct supply of refined fuel from Stanlow to its petrol stations will reduce supply costs and enhance energy security in the UK during global supply disruptions. By integrating production and retail, the company aims to eliminate several additional costs in the distribution chain, potentially passing savings onto consumers in the form of competitive prices.
Arvan Ruiya, CEO of EET Retail, emphasized that creating a large-scale integrated forecourt network is a crucial part of the company’s strategy in the UK. He noted that SGN Retail is one of the best forecourt networks in the country, and this acquisition will help accelerate the goal of reaching 800 sites nationwide.
Viral Gathani, Head of Strategic Transactions at Essar Energy Transition, described the acquisition as a significant and high-quality opportunity within the company’s merger and acquisition strategy. He revealed that major banking institutions from four continents are supporting the financing of this deal.
The acquisition will be financed through cash and a new senior debt facility of £250 million. This financing arrangement involves several international financial institutions, including First Abu Dhabi Bank, Macquarie Bank, Royal Bank of Canada, SMBC Bank International, and Oakenorth Bank.
Overall, this acquisition marks a pivotal step not just for retail expansion but also for Essar’s long-term strategy in the UK energy market. It will provide the company with greater control over the entire value chain of production, distribution, and retail, thereby strengthening its position in energy security and fuel supply.
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