The Australian Competition and Consumer Commission (ACCC) will not oppose Viva Energy’s proposed acquisition of the remaining 50 per cent interest in LOC Global (LOC) from New World Corporation (NWC) after accepting a court-enforceable undertaking requiring divestments.
LOC is a joint venture between Viva Energy and NWC that operates over 100 ‘Liberty’ branded retail fuel and convenience sites across all states and territories in mainland Australia.
Viva Energy and its related companies operate a nationwide fuel supply chain with retail fuel and convenience sites, including Coles Express/Reddy Express and OTR sites, in each Australian state and territory.
Viva Energy and LOC overlap in the supply of retail fuel across metropolitan and regional areas across South Australia, Victoria, Western Australia, New South Wales, Queensland, and Northern Territory. While this was the main focus of the ACCC’s assessment, the ACCC also looked at competition in wholesale petrol supply in Adelaide but did not consider that the proposed acquisition is likely to result in a substantial lessening of competition in this market.
To address ACCC concerns arising from the retail fuel supply overlap, the undertaking requires Viva Energy to divest 14 LOC retail fuel and convenience sites to Solo Oil Corporation (Solo), a new wholly owned subsidiary of NWC who will continue to operate retail fuel and convenience.
The 14 sites are located across South Australia, Victoria, Northern Territory, and Queensland. The divestment is to occur prior to, or on the same day as, Viva Energy’s proposed acquisition of LOC Global.
Another 13 LOC retail sites already do not form part of the transaction and will be operated by Solo.
“Without the divestiture, the ACCC was concerned the proposed acquisition could increase prices and reduce service offering, particularly in Adelaide and in certain local areas in Darwin, regional Queensland, and regional Victoria,” ACCC Commissioner Dr Philip Williams said.
Viva Energy initially offered to divest 12 retail sites to Solo but, in response to concerns raised by the ACCC, increased the number of sites to 14.
“We consider with the divestments, Solo will become a viable, effective, and long-term standalone competitor to Viva,” Dr Williams said.
With the undertaking, the ACCC considers the proposed acquisition is not likely to have the effect of substantially lessening competition in any market.
Further information, including the undertaking accepted by the ACCC, can be found on the ACCC’s public register: Viva Energy – LOC Global.
Liberty Convenience acquisition update
Viva Energy Group Limited (Viva Energy) welcomed the announcement by the ACCC that it will not oppose Viva Energy’s proposed acquisition of the remaining 50% interest in LOC Global Pty Ltd (Liberty Convenience), after accepting a court enforceable divestiture undertaking from Viva Energy, New World Corporation Pty Ltd (NWC) and Liberty Convenience.
Liberty Convenience is a joint venture currently owned 50% by Viva Energy and 50% by NWC. It was established in December 2019, utilising the retail assets of Liberty Oil Holdings Pty Ltd. Liberty Convenience and its subsidiaries currently operate (or grant rights to commission agents to operate) 105 Liberty retail fuel and convenience sites across all states and territories in Australia (excluding Tasmania and the Australian Capital Territory). Three sites are operated on behalf of NWC and will not be acquired by Viva Energy.
The acquisition will see Viva Energy acquire 88 active Liberty Convenience sites and 10 planned sites (the development pipeline), after divesting 14 Liberty Convenience sites across South Australia, Victoria, Queensland and the Northern Territory to a subsidiary of NWC in accordance with the court enforceable divestiture undertaking.
The net cash consideration will be based on a fixed multiple of average EBITDA achieved over FY2023 and FY2024, with adjustments for stores not trading for this full period and the development pipeline. It will be subject to working capital and net debt adjustments as at 31 December 2024. The consideration will be disclosed once the 2024 financial information becomes available and will be funded through existing debt facilities.
Viva Energy expects to complete the acquisition during 1Q2025, subject to Foreign Investment Review Board (FIRB) approval.
