Viva Energy acquires OTR for $1.15bn

Viva Energy has acquired the OTR Group from the Peregrine Corporation in a $1.15bn deal that is expected to make OTR the leading retail convenience brand in Australia.

The merger will amalgamate OTR, Smoke Mart & Gift Box (SMGB), and the Wholesale Fuels businesses into Viva Energy’s Convenience & Mobility business, creating a network of more than 1,000 convenience retail outlets, including Coles Express, and Liberty Convenience.

In September last year, Viva Energy acquired the Coles Express network of 710 sites, and at the time announced plans to phase out the brand over the next 3.5 years. In today’s announcement, Viva Energy has confirmed plans to transition the Coles Express network over to OTR.

The plan is to combine the best of the Coles Express and OTR digital and loyalty offers into one compelling customer proposition. The OTR digital platforms provide customers with fuel, QSR and convenience rewards and discounts, which supports higher sales through cross-selling convenience and fuel products.

Viva Energy’s CEO and Managing Director, Scott Wyatt, said today’s acquisition is transformational for Viva Energy and that OTR will become Viva Energy’s flagship convenience brand.

“The introduction of OTR’s superior convenience offering, including quick serve restaurants, will help revolutionise the diversity and attraction of our retail offering,” Wyatt said.

“As our stores increasingly become retail destinations, we expect convenience earnings will grow and reduce our dependency on traditional fuels.

“OTR outlets offer an attractive and welcoming store environment, supporting increased dwell time, which is likely to be a key factor in successfully introducing electric vehicle recharging facilities over time.”

The integration of OTR into the Viva Energy Retail and Coles Express networks is expected to drive synergies of approximately $60 million per annum, to be realised in three years, through cost and efficiency improvements, supply chain procurement, operations, technology systems and marketing.

Wyatt said that over the past three decades the Shahin family has built OTR into one of the most successful integrated convenience and fuel offerings in Australia.

“We are excited about the opportunity we have to take this proud South Australian business and brand nationally and are pleased to have Yasser Shahin work with us as we commence this journey,” he said.

“We also look forward to welcoming approximately 6,500 OTR team members to the Viva Energy business, learning from them and working with them to lift the standard of convenience retailing in this country.”

OTR Founder, Yasser Shahin, said expanding OTR’s iconic South Australian brand Australia wide delivers on several core objectives that have underpinned the business since its inception.

“This transaction delivers the realisation of the vision I have always had, and vigorously pursued; to see OTR become national, to be the leading convenience brand in Australia and to remain true to our roots and based in Adelaide.

“The coming together of one of Australia’s best retail networks with one of Australia’s leading convenience offerings has enormous industrial logic,” he said.

“I will continue to support the business following completion of the transaction, and the entire team and I are completely committed to the successful integration of these businesses. The Shahin family is committed to continuing to see Adelaide as the home of OTR and Viva Energy have provided for the realisation of a larger, enhanced OTR to continue to be headquartered here.”

Shahin will be retained by Viva Energy to support the existing OTR Group and transition the business to Jevan Bouzo, Viva Energy’s CEO of Convenience & Mobility. Their combined priorities will be to integrate the businesses, build the operating structure, further develop the OTR network, test formats for deployment into the Coles Express network and realise synergies.

The transaction involves a combination of cash and shares that will see the Shahin Family become a major shareholder of Viva Energy Australia.

The Shahin family’s ownership of the Peregrine Property, Construction & Development (PCI) and Motorsport (The Bend) divisions will remain unchanged, and the OTR Group will remain headquartered in Adelaide.

From 1 July 2023, Viva Energy will assume a 10-year sponsorship of The Bend Motorsport Park, which will include naming rights of the venue, further illustrating an alignment between the two brands and Viva Energy’s commitment to South Australia.

Sam Shahin, Managing Director of The Bend Motorsport Park said: “I am looking forward to the integration of Viva Energy into the future development of The Bend, a 10-year naming rights sponsorship will transform a nationally recognised raceway park into a worldclass venue. This is a huge opportunity for The Bend and all our dedicated staff who have made this venue what it is today.”

Completion of the transaction is expected in the second half of 2023 and is subject to ACCC approval.

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1 thought on “Viva Energy acquires OTR for $1.15bn”

  1. I’ll be surprised if the company will be allowed by the ACCC to keep all of its South Australian locations as a result of this deal. Of course, if/when some stores are offloaded, I’d like to see 7-Eleven snap them up, along with Krispy Kreme in SA (the latter of which hasn’t been mentioned in any coverage I’ve seen).

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