Engen Petroleum, a South African oil firm that specializes in downstream refined petroleum products and associated companies, and Vivo Energy, a British downstream petroleum company with subsidiaries and operations in 23 countries across Africa, have merged their African operations to form one of the continent’s largest energy distribution firms.
The merged group will have approximately 3,900 service stations and more than two billion liters of storage capacity, across 27 African nations. Engen, which is the market leader in South Africa, has over 1,300 service stations spread throughout seven African nations.
While Vivo Energy is a large pan-African retailer and distributor of fuels and lubricants to retail and business clients, operating over 2,600 service stations under the Engen and Shell brands in 23 African nations.
Following the initiation of the merger, the Chief Executive Officer of Vivo Energy, Stan Mittelman, stated, “Vivo Energy’s focus has been to invest to grow our business, and I am proud that we have more than doubled the size of our network since our formation in 2011. Four years ago, we acquired the Engen business in nine African markets, and have since worked to enhance and develop these.”
He also added that the South African market is set to benefit tremendously from the fact that Vitol, an energy firm founded in Switzerland has a 100% stake in Vivo, which in retrospect would also enhance Vivo’s portfolio.
The CEO stated, “Vitol’s acquisition of 100% of Vivo Energy last year brings more opportunities to grow even faster. Completion of this transaction, which reunites the Engen brand across Africa, will be a step change in our growth and represents a significant commitment to the South African market whilst enhancing Vivo Energy’s portfolio in other important markets.”
Seelan Naidoo, Managing Director and CEO of Engen said: “This is an exciting opportunity for Engen to build on its market-leading position in South Africa and a number of southern African countries.”
At the completion of the transaction, Petronas, a Malaysian-based energy firm, will sell its 74% stake in Engen to Vivo Energy. The Phembani Group, Petronas’ long-standing African partner and Engen’s B-BBEE stakeholder, will continue its solid relationship with Engen and retain a 21% shareholder in the South African company.
The deal is presently pending regulatory approvals and the fulfillment of preconditions. Vivo Energy was advised by Rand Merchant Bank (a part of FirstRand Bank Limited) and Standard Bank. Petronas’ transaction consultants are Morgan Stanley and Rothschild & Co.
