SA servo selloff to ease $1 billion OTR deal concerns
The buyer of South Australian fuel and convenience store chain OTR Group has committed to sell 25 service stations in SA to ease concerns from the Australian Competition and Consumer Commission.
Photo: Tony Lewis/InDaily
Of Viva Energy’s planned divestments, 24 are Coles Express sites in Adelaide while one is in Ceduna, with the proposal made to satisfy consumer watchdog concerns.
The court-enforceable divesture proposal from Viva Energy suggests Chevron as the buyer for the 25 South Australian sites, as that company currently owns just one service station at Port Augusta.
Previously, Viva had proposed to divest 23 of its 32 retail sites in Adelaide but increased this by one in response to concerns raised by ACCC.
The agreement comes as Viva Energy inches closer to taking over OTR Group from the Shahin family, owners of Peregrine Corporation, the third largest company in the state on InDaily‘s South Australian Business Index.
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.
The deal requires approval from both the Foreign Investment Review Board and the ACCC.
ACCC commissioner Stephen Ridgeway today said the watchdog was assessing Viva’s proposed divestment plan.
“We are assessing whether the divestiture proposal will effectively address our competition concerns regarding the supply of retail fuel in South Australia and replace the competition that would be lost with the proposed acquisition,” Ridgeway said.
“We are seeking feedback from market participants on whether Viva’s divestiture to Chevron will result in the creation of an effective, independent and long-term competitor to a combined Viva and OTR.”
Ridgeway said today’s announcement “should not be interpreted to mean that this or any other form of remedy will ultimately be accepted”.
“It is also not an indication that Chevron is considered by the ACCC as an appropriate buyer of the divestiture assets at this stage,” he said.
Submissions on the divesture proposal have been invited by the watchdog and will be accepted until November 27.
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