AUSTRALIA | The 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 (excluding Tasmania and the ACT).
In each Australian state and territory, 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.
Viva Energy and LOC overlap in retail fuel supply in metropolitan and regional areas of South Australia, Victoria, Western Australia, New South Wales, Queensland, and the Northern Territory.
While this was the main focus of the assessment, the ACCC also looked at competition in wholesale petrol supply in Adelaide but did not consider that the proposed acquisition would likely result in substantially lessening 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 subsidiary of NWC that will continue to operate retail fuel and convenience.
The 14 sites are located in South Australia, Victoria, the 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 certain local areas in Darwin, regional Queensland, and regional Victoria,” said ACCC Commissioner Dr Philip Williams.
Viva Energy initially offered to divest 12 retail sites to Solo but, in response to the ACCC's concerns, increased the number of sites to 14.
“We consider that, with the divestments, Solo will become a viable, effective, and long-term standalone competitor to Viva.”
With the undertaking, the ACCC has considered the proposed acquisition unlikely to lessen competition in any market substantially.
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