Australian retailer Coles Group has entered into an agreement to restructure the terms of the Fuel and Convenience Alliance (New Alliance) with Viva Energy Limited (Viva Energy) until 2029.
The Coles Convenience business is expected to be Australia’s leading convenience retailer.
The New Alliance is expected to deliver a more competitive customer offer, provide an opportunity to expand the network and better align contributions and incentives for each party to jointly grow the business going forward.
Viva Energy will pay Coles $137 million at transaction close and a payment for net working capital upon expiry or early termination of the Alliance. In addition, Coles will also receive a further payment for the Convenience business upon expiry or early termination of the Alliance.
Coles CEO Steven Cain said: “We believe the benefits of the New Agreement are compelling for all customers, team members and shareholders. We look forward to jointly working with Viva Energy to re-establishing the Alliance as Australia’s leading petrol and convenience retailer.”
Scott Wyatt, Viva Energy CEO, said “Today’s announcement signals a significant step forward in our long-standing Alliance with Coles Express. Together, we represent Australia’s leading fuel and convenience offer and we look forward to growing the Alliance with Coles Express in the years to come. I am excited by the benefits these new arrangements will enable us to deliver for both our customers and our shareholders.”
The terms of the New Alliance are not subject to any conditions precedent and are expected to come into effect in early March 2019.