Downstream oil in brief: EG Group to buy OMV's German retail network Report

Insight 22 January 2021

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Report summary

EG Group has entered into an agreement to acquire OMV's German network of 285 service stations in the South of the country. The deal is expected to close later in 2021 and will see the EG Group’s network become the third-largest in Germany. Success will be dependent on whether the heavily leveraged EG Group can extract the same level of value from its continental Europe network as it has done in the UK. For EG Group, could this be the end of a spate of debt-funded acquisitions and is an IPO next on the cards?

Exiting refiners and changing consumer behaviour paves the way for independent fuel retailers
Extracting maximum value from service stations as road transport fuel demand declines
Conclusion
Refining margins:
- December values decline as European refinery run rates remain low and tighter lockdown restrictions are implemented
Marketing margins:
- Wholesale prices rise on the back of strengthening crude oil prices turning average European fuel margins negative once again in December