Viva Energy, an Australian fuel refiner, importer, wholesaler, distributor, and retailer, has proposed a divestiture plan to the Australian Competition and Consumer Commission (ACCC) as part of its acquisition of the OTR Group. The proposal aims to address competition concerns regarding the supply of retail fuel in South Australia and ensure that competition is not compromised by the acquisition.
Viva Energy and its related companies currently operate a nationwide fuel supply chain with retail sites in every Australian state and territory, including Coles Express convenience sites. On the other hand, the OTR Group is a fuel and convenience retailer primarily operating in South Australia, with some locations in other states and territories.
ACCC Commissioner Stephen Ridgeway stated that the ACCC is assessing whether Viva Energy’s divestiture proposal will effectively resolve the competition concerns regarding the supply of retail fuel in South Australia and fill the void left by the proposed acquisition. The divestiture proposal would require Viva Energy to sell 24 Coles Express sites in Adelaide and an additional site in Ceduna, on the Eyre Peninsula, to an ACCC-approved purchaser.
Viva Energy has put forward Chevron as the potential buyer for the divestiture sites. Chevron currently operates one retail site in South Australia, located in Port Augusta. However, the ACCC wants to gather feedback from market participants on whether Chevron’s acquisition of the divestiture sites would indeed result in the creation of a viable and long-term competitor to a combined Viva Energy and OTR Group.
It is important to note that the ACCC’s decision to publicly consult on the divestiture proposal does not indicate that this or any other form of remedy will be accepted. Furthermore, the involvement of Chevron as the buyer of the divestiture assets is still subject to further consideration by the ACCC.
The ACCC has invited submissions on the divestiture proposal until November 27, 2023. Initially, Viva Energy proposed divesting 23 of its 32 retail sites in Adelaide. However, in response to concerns raised by the ACCC, the number of sites to be divested increased to 24 in Adelaide and one site on the Eyre Peninsula.
The proposed acquisition will bring together the retail fuel, wholesale fuel, and retail convenience and grocery offerings of Viva Energy and the OTR Group. As the ACCC evaluates the divestiture proposal and considers feedback from interested parties, it aims to ensure that the acquisition does not harm competition in the South Australian market and that consumers continue to have access to a range of choices in the retail fuel sector.
In conclusion, Viva Energy’s proposed divestiture plan in its acquisition of the OTR Group aims to address competition concerns and maintain a competitive market for retail fuel in South Australia. With the ACCC’s ongoing evaluation and public consultation, the ultimate outcome will be determined based on whether the divestiture proposal effectively safeguards competition and ensures the presence of a strong and independent competitor in the market.
