Australia's top grocer Woolworths is to sell its chain of petrol stations to BP for A$1.8 billion ($1.3 billion), the latest disposal in a bid to return the company's focus to its core supermarket business.
The sale of the fuel business, comprising 527 petrol stations and 16 development sites was flagged in September.
It follows its earlier exit from a disastrous foray into hardware, which led to a A$1.8 billion impairment charge.
The fuel sold at Woolworths' petrol stations is currently supplied by Caltex Australia, which also bid for the business. Under the new arrangement BP will eventually supply and sell the fuel.
The fuel business reported earnings before tax and significant items of A$117.8m for the year ended June 30.
Its sale "is not expected to have a material impact on Woolworths Group earnings", the company said.
"The release of A$1.785 billion from the sale will be used to strengthen our balance sheet and reinvest in our core businesses," Woolworths' chief executive Brad Banducci said.
The 92-year-old company posted its first annual loss since its 1993 listing in August, hit hard by the hardware impairment and squeezed margins amid a price war with rival Coles, owned by Wesfarmers, and new entrants such as Germany's Aldi.
The deal, which was signed on Christmas Eve, is subject to regulatory approval and is not expected to be completed until January 2018 at the earliest, the statement said.
It also involves an agreement to continue a fuel voucher scheme and the parties will jointly trial a convenience business at 200 of the petrol stations.
BP downstream chief executive Tufan Erginbilgic said in a separate statement that it has similar and successful partnerships globally with retailers such as Marks and Spencer.
