Australian Regulator Greenlights Viva Energy’s A$1.15 Billion Acquisition

The Australian Competition and Consumer Commission (ACCC) granted approval on Thursday for Viva Energy’s acquisition of convenience store operator On the Run (OTR Group) from Peregrine, sealing the deal at A$1.15 billion ($765.90 million). This move sparked a surge in Viva Energy’s shares, catapulting them over 5% higher.

The ACCC’s nod came on the heels of a court enforceable undertaking by Viva Energy, wherein the company committed to divesting 25 Coles Express sites in South Australia. Earlier this year, Viva Energy finalized the acquisition of Coles Express convenience stores, a strategic move that bolstered its national presence, particularly in comparison to its key competitor, Ampol Ltd (ALD.AX).

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The ACCC’s comprehensive review honed in on the areas where the OTR Group and Viva’s operations overlapped, primarily in South Australia and the Northern Territory. There was a palpable concern that Viva’s acquisition of OTR Group would create a conglomerate boasting the largest retail fuel network in South Australia, seamlessly merging with Viva Energy’s existing retail network. This amalgamation would have given Viva Energy an extensive network, dwarfing that of its nearest competitor.

“The regulator was concerned Viva’s acquisition of OTR Group would combine the largest retail fuel network in South Australia with Viva Energy’s retail network, providing Viva with an extended network significantly larger than its next largest rival,” the ACCC noted in its official statement.

Source: Reuters