Australia's leading car retail group Eagers Automotive (ASX: APE) has entered a $205 million deal to buy Canberra dealerships from one of its top shareholders - WFM Motors.
The strategic deal will consolidate Eagers' 10 per cent market share in Australia, and mark its first-ever presence in the Australian Capital Territory (ACT).
If the takeover is approved by shareholders in June, APE will own 10 properties and three commercially leased dealerships, which comprises of brands like Toyota, Ford, Volkswagen, Jeep, Lexus, Subaru, Mitsubishi, Volvo and GMSV.
Eagers Automotive CEO Keith Thornton said “the ACT is a key strategic region” for the company and serves as “an opportunity to grow our national footprint.”
According to an ASX update released in April 2021, WFM Motors is the top shareholder of APE and owns a 27 per cent stake in the company as of 26 March 2021.
“The acquisition of this established high-quality dealership group marks an attractive entry point into this region for Eagers Automotive which offers immediate scale and scope for future growth,” Thornton said.
“The portfolio is high performing, representing leading manufacturers, and is situated in prime operating locations around Canberra.
“Our acquisition of the associated properties is consistent with the ongoing execution of our Next100 strategy and will provide the platform to expand our parallel businesses into the ACT, including easyauto123, our national fixed price pre-owned business.”
The ACT group of WFM dealerships employs about 400 staff and produces an annual turnover of $450 million.
The transaction is still subject to shareholder approval as billionaire Nick Politis is both an executive chairman at WFM Motors and also sits on the board of directors for APE.
The takeover proposal is also subject to due diligence, transaction documentation, finance approval, and OEM and landlord consent.
APE has a 27.8 per cent market share in the Northern Territory, followed by 20 per cent in WA, 15 per cent in SA and 11 per cent in both Queensland and Tasmania.
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