Viva Energy Group is to acquire the Coles Express convenience store and fuel retail business from Coles.

The $300 million acquisition will create the largest single branded Australian fuel and convenience network under a single retail operator, with 710 Coles sites to be rebranded over the next two years.

Coles Group and Viva Energy had a Fuel and Convenience Alliance via which, under arrangements announced in 2019, was set to run to 2029 and saw Viva Energy take responsibility for retail fuel pricing and marketing while Coles Express remained responsible for convenience retailing through operating the stores.

Viva said in a statement that by bringing the two businesses together now through the acquisition, it can ‘more efficiently optimise the network and is in a better position to make the investments necessary to keep evolving the convenience offer at a point where sales are recovering, and consumers are increasingly seeking greater convenience offers.’

Viva is the exclusive licensee to supply Shell fuels in Australia, has a network of around 1,350 Shell and Liberty service stations across the country, and also owns and operates the Geelong Oil Refinery.

As part of the transaction, Coles customers will continue to be offered benefits such as access to the four cent per litre fuel docket, and Viva Energy will remain a partner of the Flybuys Program, allowing customers to continue redeeming points across the network.

Viva Energy said that it expects the convenience market – which had achieved average annual growth of 3.1 per cent in the last seven calendar years – to continue to deliver strong growth potential.

The company also said that demand for traditional fuels is expected to remain strong well into the next decade, ‘and the adoption of new energies such as battery and hydrogen electric vehicles will lead to growing demand for convenient on-road recharging and refuelling options, and therefore new convenience growth opportunities.’

“This is an exciting step for Viva Energy that will enable us to further extend our network, invest in new and innovative convenience offers across our stores, and enhance our loyalty and digital programs to simplify the way our customers transact with us” said Scott Wyatt, CEO of Viva Energy.

The acquisition is subject to regulatory approvals and is expected to complete in the first half of 2023.

Source: Motor Trader e-Magazine (October 2022) 

26 October 2022