Watchdog approves $1 billion OTR buyout

The Australian Competition and Consumer Commission has given the green light to Viva Energy’s proposed $1.15 billion buyout of Adelaide-based Peregrine Corporation’s chain of fuel and food outlets.

Dec 14, 2023, updated Dec 14, 2023
Photo: Tony Lewis/InDaily.

Photo: Tony Lewis/InDaily.

After accepting a court-enforceable undertaking in which Viva will sell 25 Coles Express sites in South Australia to Chevron to ease competition concerns, the ACCC waved through the deal.

Viva now expects to complete the acquisition of OTR in the first half of 2024, subject to approval from the Foreign Investment Review Board (FIRB).

It will be a billion-dollar payday for the Shahin family who will become major shareholders of Viva Energy once the deal is complete.

The ACCC today said its review of competition concerns focused on areas in which the OTR Group and Viva’s operations overlapped – “predominantly in South Australia and the Northern Territory”.

“Without the divestiture, the proposed acquisition would combine the largest retail fuel network in South Australia with Viva Energy’s retail network, providing Viva Energy with an extended network that is significantly larger than its next largest rival,” ACCC commissioner Stephen Ridgeway said.

“The ACCC was concerned that the proposed acquisition would adversely affect competition and reduce choice for consumers in Adelaide and Ceduna.”

Viva initially offered to divest 23 of its 32 Adelaide retail sites, but increased the proposal to 25 in response to the ACCC’s concerns.

Viva proposed Chevron as the upfront purchaser of the 25 Coles Express sites, which has been approved by the ACCC. It said that Chevron had a global presence as a fuel producer, importer, wholesaler and retailer, and acquiring these sites would enable it to expand into South Australia.

“As part of our assessment, we took into account Chevron’s previous and current experience in the Australian fuel industry, as well as its financial capability and plans to maintain and operate the 25 divestiture sites,” Ridgeway said.

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As part of the deal, Viva will receive 13 Chevron sites in Queensland, New South Wales and Western Australia.

“The ACCC considers that the undertaking given by Viva Energy will create a viable, effective, standalone, independent and long-term competitor,” Ridgeway said.

Under Viva’s deal with Peregrine, the buyer will get 184 OTR retail fuel sites including 153 in South Australia (115 in Adelaide), 15 in the Northern Territory, 11 in Victoria, and two in New South Wales.

The $1.15 billion deal will amalgamate OTR Group, Smokemart and Giftbox, and the wholesale fuels business into Viva’s Convenience and Mobility arm.

OTR will remain based in Adelaide as part of the deal, and the Shahin family will retain ownership of Peregrine Property and The Bend Motorsport Park.

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