Viva Energy is embarking on a massive transformation, investing over $250 million to upgrade its convenience stores and fuel stations. This move comes after the completion of its acquisition of South Australia’s OTR Group for $1.215 billion.
CEO Scott Wyatt sees this acquisition as a game-changer. It gives Viva an additional 226 convenience stores and presents an opportunity to replicate OTR’s success nationwide.
As part of its plan, Viva will revamp its Coles Express stores over the next five years, rebranding them as “On the Run” with a stronger focus on food. This shift reflects the changing needs of customers, especially with the gradual rise of electric vehicles (EVs).
Wyatt emphasises that Viva is evolving from a mere fuel retailer to a comprehensive convenience and food provider. This strategic shift aims to cater to customers’ needs as they transition to new energy sources like EVs.
The focus on food offerings aligns well with the EV trend, where customers may spend around 30 minutes in stores while charging their vehicles.
But this transformation is just the beginning. Viva plans to invest over $50 million annually for the next five years to upgrade stores across the country. Additionally, they’ll collaborate with landlords to invest in sites and stores, demonstrating confidence in their strategy.
OTR’s network includes various quick-service restaurants and shops, making it a valuable addition to Viva’s portfolio. The deal was sealed after Viva agreed to sell 25 of its South Australian sites to Chevron, securing regulatory clearance.
This acquisition is crucial for Viva’s ambition to boost earnings in convenience and mobility beyond $500 million in the next five years. The payment for the deal included $150 million in equity and $1.065 billion in debt.
To accommodate these changes, Viva has adjusted its capital expenditure guidance for the year and expects transaction and integration costs to be paid by 2026.
Yasser Shahin, the founder of OTR, will be a consultant to Viva for two years, focusing on expanding the OTR offer across the company’s network. This collaboration underscores Viva’s commitment to leveraging OTR’s expertise for further growth.
For the latest retailer news and information, check out the ServoPro website or to speak to us about how we can help your business contact us.