The Australian competition regulator on Thursday approved Viva Energy’s acquisition of convenience store operator On the Run (OTR Group) from Peregrine for A$1.15 billion ($765.90 million), sending the fuel supplier’s shares over 5% higher.
The Australian Competition and Consumer Commission’s (ACCC) approval comes after a court enforceable undertaking by Viva Energy to divest 25 Coles Express sites in South Australia.
In May this year, Viva completed the acquisition of Coles Express convenience stores, strengthening its footprint nationwide compared to its rival Ampol Ltd.
The ACCC’s review focused on areas in which the OTR Group and Viva’s operations overlapped, which was predominantly in South Australia and the Northern Territory.
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.
To alleviate the concerns, Viva will sell 25 Coles Express sites in South Australia to Chevron, which the regulator has approved.
In exchange, Viva will receive 13 Chevron sites located in Queensland, New South Wales and Western Australia, the regulator said.
“The ACCC considers that the undertaking given by Viva Energy will create a viable, effective, standalone, independent and long-term competitor,” ACCC Commissioner Stephen Ridgeway said in a statement.
Viva welcomed the regulator’s announcement and said it expects to complete the acquisition of OTR Group in the first half of next year, subject to the foreign investment review board’s approval.
Shares of the oil refiner jumped as much as 5.4% to A$3.300, hitting a record high. The stock also posted its biggest intraday gain since April 5.