AP Eagers has offered to offload its dealerships in Newcastle and the Hunter Valley in a $54 million deal to ease the competition watchdog’s concerns about its proposed acquisition of rival car dealer Automotive Holdings Group.
AP Eagers said on Friday it has a non-binding agreement to sell Kloster Motor Group to family-owned car dealership Tony White Group by November if the Australian Competition and Consumer Commission approves its takeover of AHG.
The ACCC had said last month that it had preliminary concerns about a merger that would leave one company in control of 46 per cent of new car dealerships in the region.
AP Eagers said it doesn’t believe the merger would substantially lessen competition, but was offering to sell Klosters so it could proceed with the acquisition in a timely way.
Based in Newcastle, Klosters is an 85-year-old automotive retailer that has been owned by AP Eagers since 2007.
It sells nine major vehicle brands at locations in Newcastle, Cardiff and Maitland, employing 410 people and generates $420 million in revenue.
Tony White Group sells 25 car makes at 40 locations across Australia’s east coast and Tasmania.
“We believe TWG represents an excellent fit with Klosters and our staff who are the foundation of this iconic business in the Newcastle and Hunter Valley region,” AP Eagers chief executive Martin Ward said.
The ACCC is scheduled to announce whether it will approve the merger by July 26.