Caltex to switch to Ampol brand after Chevron ends licence agreement
Ampol servos are set to return to Australia after a two-decade absence, as Caltex announces a name change.
Ampol petrol stations are set to return to suburban Australia after a two-decade absence, with Caltex announcing it will change its name after Chevron’s surprise return to the local fuel market.
Caltex stations are now run by ASX-listed Caltex Australia, which was using the brand name under license from Chevron.
But the company said on Monday the US oil and gas giant - which just spent $425 million acquiring Puma’s network of Australian petrol stations - had terminated their licensing agreement.
That will trigger both the need to rename the corporate entity, as well as the return of the “iconic” Ampol brand to Australian highways and street corners.
The Ampol name in Australia dates back to 1936, when the Australian Motorists Petrol Company was formed in response to Australians’ concerns about petrol prices and allegations of transfer pricing by foreign oil companies.
The Ampol brand name was phased out after a merger with Caltex in 1995.
Caltex Australia had, however, maintained the brand for its Singaporean operations, which couldn’t operate as Caltex as Chevron was using that brand in most markets outside Australia.
Caltex still holds exclusive rights to the brand in Australia for the next two years and, while it is stuck with the name for the next six months, is expected to move as quickly as it can to rebrand its own stations and affiliates to re-establish Ampol in the market before Chevron is able make use of the brand recognition for its Puma outlets.
The company’s market research suggests the Ampol name still resonates strongly with older Australians, but its absence from the market for more than two decades leaves work to do amongst younger drivers.
Ampol was founded in 1936 and struck its first joint venture with Caltex, just bought by Chevron, in 1952 - the year Ampol opened its first company-owned petrol station in Sydney.
The pair formed West Australian Petroleum (WAPET), the same year, after the discovery of oil off the coast of Western Australia, and jointly helped open up the rich North West Shelf gas project.
Listed on the Australian Stock Exchange since 1948, Ampol was bought out by Pioneer International in 1988, which then merged the assets with Caltex in 1995.
Caltex managing director Julian Segal said on Monday the company had already been planning a return to the use of the Ampol brand, saying the company’s market research showed it was still a trusted name despite a two decade absence from the market.
“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 segment,” he said.
“The transition to Ampol also supports our evolution into a growing regional fuels and convenience business.”
Catex said its licensing agreement with Chevron provides for a three-year transition period, and the company will retain the exclusive use of the brand for at least two years - a six-month notice period and the first 18 months of a work-out period.
Caltex said the licence agreement had been scrapped after 18 months of discussions with Chevron. The US giant sold its $4.6 billion half-share in Caltex Australia in 2015 but maintained the licensing deal for use of the name.
The transition is expected to cost Caltex $165 million. However, the transition should ultimately save Caltex $18 million to $20 million in annual trademark licence fees, which is in addition to cost-saving initiatives previously announced by the company.
Caltex said it would seek shareholder approval to change its corporate name to Ampol at the annual meeting in May.
Caltex is also fighting off a $8.6 billion takeover offer from giant Canadian convenience store operator Alimentation Couche-Tard, saying the $34.50 a share unsolicited bid undervalues its assets.
Shares in Caltex Australia fell 3c on Monday to close the session at $34.14.
