One of South Australia’s largest private employers, service station chain OTR, is set to be taken over in a deal worth more than $1 billion.

Key points:

  • Viva Energy has agreed to buy OTR for $1.15 billion, the SA-based chain said
  • It means Viva will take on 205 stores operating under the OTR banner
  • The transaction is subject to regulatory approvals from the ACCC

Petrol and diesel supplier Viva Energy has struck an agreement to buy the OTR Group from Peregrine Corporation — owners of OTR convenience stores and petrol stations. 

It means Viva will take on 205 stores operating under the OTR banner that generate more than $3 billion worth of revenue a year and employ about 6,500 people. 

The $1.15 billion deal, which will bring OTR’s stores and hundreds of Coles Express sites across Australia under the one banner, is subject to regulatory approvals from the ACCC.

“When that process is done and we’ve got clearance, the deal will close and we’ll be on our way to making OTR the national brand it deserves to be,” OTR founder Yasser Shahin told ABC Radio Adelaide’s Stacey Lee and David Bevan.

That regulatory approval process could take anywhere from six to 18 months, Mr Shahin said.

He said the reason for the deal meant OTR was “going national” and would “replace Coles Express”.

“The intention and the reason behind this deal is to replace what is now the Coles Express brand in 700-plus Shell sites and replace that with OTR,” he said.

“It’s been a wonderful journey and it’s awesome to have built this all from Adelaide.”

The deal means Viva will take on 205 stores operating under the OTR banner.(ABC North and West: Declan Gooch)

Mr Shahin described the deal as more a “merger than a sale”, and said that, if it is approved, the Shahin family would be one of the biggest shareholders in Viva and that he would stay on to help run it.

“There are 7,000 staff, Viva have got 6,000 and it’s the right thing for the business,” he said.

“A condition of the deal from day one was that Viva agree to keep the business headquartered in Adelaide and they’ve actually done one better — they’ve agreed to make Adelaide the headquarters of the entire national Coles Express/OTR retail business, so that’s a 13,000-person organisation.”

In a statement to the ASX, Viva Energy’s CEO Scott Wyatt said the deal would “lift the standard of convenience retailing in this country”.

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

“OTR outlets offer an attractive and welcoming store environment, supporting increased dwell time.”

OTR operates in South Australia and north-west Victoria, and Mr Shahin said there would not be any redundancies and that the current workforce would be offered jobs “on no less favourable terms”.

The chain recently secured permission to sell alcohol through its app after a successful appeal to SA’s licensing court.

Last year, it was revealed OTR had agreed to pay $5.8 million to settle long-running wage underpayment claims, after class action was launched on behalf of 1,050 workers in May 2020.

Posted , updated