The broker says approval from the competition regulator could present hurdles to fuel and petrol supplier Viva Energy’s $1.15b acquisition of On the Run.
Approval from the competition watchdog could present a risk to Viva Energy’s $1.15 billion plan to acquire convenience store chain On the Run Group, amid concerns about increased market concentration, according to UBS.
The broker relied on data from a June 2021 ACCC report, which showed at the time that OTR sites held 37 per cent market share in Adelaide, while Coles Express had 11 per cent and Liberty had 9 per cent. The report examined data from the competition regulator to set out how it would assess the extent to which Viva could extract pricing power, evaluating examples whereApplying that method, UBS found that out of the 290 retail sites selling fuel in Adelaide in June 2020, average annual petrol prices were 1.9¢ a litre higher at OTR venues than the market annual average petrol price. Coles Express was priced 1.7¢ a litre higher than the market average.
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