Z Energy in takeover deal with Australian fuel giant

New Zealand's largest fuel retailer Z Energy is a step closer to selling up its petrol pumps to Australia.

Z's board is recommending its shareholders accept an improved takeover offer from Australian company Ampol, which also owns Gull. And it could mean lower prices at the pump.

Z Energy is our largest fuel retailer with 330 Z-branded and Caltex stations nationwide. But after 11 years it's heading offshore.

"Z will be purchased by Ampol, a very large downstream fuel company in Australia for around $2 billion," Z CEO Mike Bennetts says.

Z Energy's recommending its shareholders accept the takeover offer of $3.78 a share.

"It's like buying a house or car, if someone comes along and offers you more than what you think it's worth then you would recommend you would sell it," Bennetts says.

Australia's Ampol already owns fuel retailer Gull - which it's committed to sell in order to get the deal through.

"Every location Gull has gone to they've brought with them the 'Gull effect' and had a significant and positive influence on the price of fuel. We'd like that to continue," says Terry Collins, principal adviser with motoring lobby Automobile Association.

That's something consumers are keen for.

"If it increases competition and keeps fuel prices down that's a good thing," one person says.

"If they're associated with Gull that sounds good coz they're a cheaper petrol," another says.

"Being a part of a bigger company like Ampol, we can improve the costs of the products we bring into the country so that could be a benefit to customers," Bennetts adds.

If the shareholders say yes the deal still needs the tick of approval from the Commerce Commission, Overseas Investment Office and the High Court.

The sale's also conditional on the transition of the Marsden Point refinery to an import-only terminal. 

Shareholders are expected to vote on the takeover early next year.