Woolworths pub grab includes the Billabong

Australia’s Woolworths has received clearance to buy The Billabong. Before you worry about mixing board shorts and bananas in the same basket, it isn’t the boardsports retailer but The Billabong Hotel, in Merrylands, Sydney.

Woolworths’ majority-owned Australian Leisure and Hospitality Group bought 32 pubs and hotels for around 400 million Australian dollars (US$408 million) in a deal brokered by Ray White Hotels.

The Billabong Hotel in Merrylands, Sydney

But the Australian Competition and Consumer Commission has opposed the acquisition of certain hotels which also act as takeaway packaged liquor retailers, citing the effect of substantially lessening competition in those local markets.

The group owns and operates liquor store chains Dan Murphy’s and BWS, as well as 294 licensed venues across Australia.

But purchase of 28 of the pubs and hotels — some of which incorporate takeaway liquor retailers — were deemed unlikely to substantially lessen competition.

“All 32 pubs are in NSW with a large number in Sydney. The Woolworths consortium will lease the hotels with the Laundy family continuing to be the owner of the freeholds. The leases are very long-term averaging in the order of 40 years each,” Ray White chairman Brian White said in a statement.

Australian Leisure and Hospitality Group’s Chief Executive Officer Bruce Mathieson owns the 25% of the company not owned by Woolworths.

Source: The Wall Street Journal, 11 July 2012