(Updates throughout with details on regulator's comments) Dec...

(Updates throughout with details on regulator's comments)

Dec 14 (Reuters) - The Australian competition regulator on Thursday approved Viva Energy's (VEA) acquisition of convenience store operator On the Run (OTR Group) from Adelaide-based Peregrine Corp for A$1.15 billion ($765.90 million).

The Australian Competition and Consumer Commission's (ACCC) approval comes after a court enforceable undertaking by Viva Energy to divest 25 Coles Express sites in South Australia.

In May this year, Viva completed the acquisition of Coles Express convenience stores, strengthening its footprint nationwide compared to its rival Ampol Ltd (ALD) .

The ACCC's review focused on areas in which the OTR Group and Viva's operations overlapped, which was predominantly in South Australia and the Northern Territory.

The regulator was concerned Viva's acquisition of OTR Group "would combine the largest retail fuel network in South Australia with Viva Energy's retail network", providing Viva Energy with an extended network significantly larger than its next largest rival.

To alleviate the concerns, Viva Energy will sell 25 Coles Express sites in South Australia to Chevron CVX.N , which the regulator has approved.

In exchange, Viva Energy will receive 13 Chevron sites located in Queensland, New South Wales and Western Australia, the regulator said.

"The ACCC considers that the undertaking given by Viva Energy will create a viable, effective, standalone, independent and long-term competitor," ACCC Commissioner Stephen Ridgeway said.

($1 = 1.5015 Australian dollars) (([email protected]; Twitter: https://twitter.com/sameer_manekar))