(Adds Woolworths comment)
SYDNEY, Dec 28 (Reuters) - Australian supermarket giantWoolworths Ltd is selling its chain of petrol stationsto BP plc for A$1.8 billion ($1.29 billion) in cash,Woolworths said in a statement on Wednesday.
The sale of the fuel business, comprising 527 petrolstations and 16 development sites was flagged in September aspart of a broader divestment drive at Woolworths.
"The release of $1.785 billion from the sale will be used tostrengthen our balance sheet and reinvest in our corebusinesses," Woolworths Chief Executive Brad Banducci said inthe statement.
The fuel business reported earnings before income tax andsignificant items of A$117.8 million for the year ended June 30.
"The sale of the fuel business is not expected to have amaterial impact on Woolworths Group earnings," the statementadded.
The deal, which was signed on Christmas Eve, is subject toregulatory approval and is not expected to be completed untilJanuary 2018 at the earliest, the statement said.
It also involves an agreement to continue a fuel voucherscheme and the parties will jointly trial a convenience businessat 200 of the petrol stations.
Caltex Australia also bid for the business, but didnot disclose a price in a statement in October. ($1 = 1.3926 Australian dollars) (Reporting by Wayne Cole; Editing by Alison Williams)
BP (BP.)