News of the deal, which marks an acceleration of ASX-listed Viva’s ambitions to build a network of more than 1000 stores within three years, sent Viva Energy’s shares up more than 4 per cent in early trade to $3.22.

Viva told analysts it intended for OTR to replace Coles Express as its flagship convenience brand “over time”. In a $300 million deal last year, Viva acquired the Coles Express convenience business, which it had previously operated in a joint venture with Coles.

OTR’s network includes 184 integrated fuel and convenience stores and 31 standalone retail stores. The company generates more than $3 billion of revenue a year and employs about 6500 people.

Under Wednesday’s deal, which is subject to regulatory clearance from the Australian Competition and Consumer Commission (ACCC), Viva will also acquire OTR’s wholesale fuels businesses and the Smokemart & GiftBox tobacco stores. If the deal proceeds, Viva will become the biggest employer in South Australia, with more than 14,000 team members.

However, Gordon Ramsay, an analyst with the Royal Bank of Canada, said on Wednesday that ACCC issues loomed as a “potential deal blocker”.

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Yasser Shahin, who founded OTR and built it up from a single petrol station in suburban Adelaide in the 1980s, said the deal had realised the vision he had always had for the company – “to see OTR become national, to be the leading convenience brand in Australia and to remain true to our roots and based in Adelaide”.

“The coming together of one of Australia’s best retail networks with one of Australia’s leading convenience offerings has enormous industrial logic,” he said.

“The Shahin family is committed to continuing to see Adelaide as the home of OTR and Viva Energy have provided for the realisation of a larger, enhanced OTR to continue to be headquartered here.”