Woolworths has opted for plan B in its efforts to offload its petrol business, accepting a $1.7 billion offer from British retail conglomerate EG Group.

Key points: After a two-year process Woolworth looks like it will sell its petrol business for $1.7b

After a two-year process Woolworth looks like it will sell its petrol business for $1.7b The price is less than the $1.8b BP offered before shut down by ACCC

The price is less than the $1.8b BP offered before shut down by ACCC EG will will maintain fuel discount and loyalty point scheme as well as wholesale contract in 15-year deal

In an announcement to the ASX after the close of trading on Friday afternoon, Woolworths said it had entered into a binding agreement to sell its 540 fuel convenience sites to EG.

The new deal is less than the $1.8 billion energy giant BP offered before that bid was scuttled by the Australian Competition and Consumer Commission late last year.

However, Woolworths Chief Executive Brad Banducci put a positive spin on his second prize.

"This transaction is a positive for our customers, our team and our shareholders," Mr Banducci said in a statement to the ASX.

Woolworths will maintain some skin in the game with a 15-year commercial alliance including the existing 4-cents-a-litre fuel discounts, loyalty points scheme and wholesale product supply.

"The agreement will continue to strengthen the opportunities our customers have for greater value when shopping with us, with the benefits of the Woolworths Rewards program and the fuel discount offer set to continue," Mr Banducci said.

"A long-term wholesale food supply arrangement will also ensure that EG Group can benefit from competitive product sourcing, including Woolworths' own brands, to provide a world-class convenience offer that will add further scale to Woolworths FoodCo."

Supermarkets sharpen their focus

Woolworths decision to sell out of petrol will sharpen it head-to-head battle with long-term supermarket rival Coles.

Wesfarmers shareholders are expected to approve the demerger of the Coles business at an Extraordinary General Meeting next week, giving the supermarket chain the ability to focus on the core business of selling groceries in an increasingly competitive market.

EG Group was started in 2001 by brothers Zuber and Mohsin Issa and operates around 47,00 fuel and convenience sites across Europe and North America.

EG Group Co-CEO Mohsin Issa said he was committed to developing Woolworths' existing sites and introducing new brands to the chain.

"The Woolworths assets present a fantastic opportunity to further grow out international footprint," he said.

While the new deal is unlikely to encounter the same problems the BP deal with the ACCC, it is still subject to Foreign Investment Review Board approval.