Energy giant Vivo Energy is set to acquire the majority shares in Engen, its direct competitor in both Mauritius and the African continent.
The shares to be acquired – 74% in Engen – currently belong to Malaysia’s Petronas which the latter has acquired between 1996 and 1998, Vivo Energy has said.
Engen currently operates 1,300 service stations across seven countries in sub-Saharan Africa and 35 in Mauritius.
The combined group will have over 3,900 service stations and more than two billion litres of storage capacity across 27 African countries. In Mauritius, the consolidated group with have 86 service stations.
Engen’s 120,000 barrels a day (b/d) Wentworth refinery, which has been an important source of product for the bunker market, is being converted into a storage and terminalling facility. Specialist media report that the company’s bunkering activities are currently focused on Richards Bay in South Africa, and Mauritius.
Revealing the details of negotiation, Vivo reported that the Phembani Group, Petronas’ long-standing partner in Africa and Engen’s Broad-Based Black Economic Empowerment (B-BBEE) shareholder, will remain a shareholder in Engen alongside Vivo Energy.
“The transaction will further benefit employees of Engen through a newly implemented 5% employee share ownership programme, resulting in Engen South Africa being 26% owned by previously disadvantaged parties.”
Vivo Energy, which was acquired by the Vitol group in July last year, was established in 2011 operating as the company behind the Shell and Engen brands across many African markets.
Petronas President and Group Chief Executive Officer Datuk Tengku Muhammad Taufik was quoted as saying: “While Petronas’ decision to step back and reshape its portfolio is driven by evolving business priorities, we fully appreciate Engen’s potential and acknowledge that this is a necessary move forward to further accelerate its growth.”
Market leading position
Stan Mittelman, CEO of Vivo Energy, also commented on the negotiation: “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. Vitol’s acquisition of 100% of Vivo Energy last year brings more opportunity 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 added: ‘This is an exciting opportunity for Engen to build on its market leading position in South Africa and a number of southern African countries. It allows us to leverage our strong brand equity, leading retail footprint, extensive supply chain capability and unrivalled customer service to be a leading contributor to Vivo Energy and Vitol’s ambition to build a stronger and more successful pan-African energy champion. Engen is excited to become part of the enlarged business and this will set up our business to be stronger and more successful than ever before.”
The transaction is currently pending regulatory approvals.
Rand Merchant Bank (a division of FirstRand Bank Limited) and Standard Bank advised Vivo Energy. Morgan Stanley and Rothschild & Co are advisors to Petronas on this transaction.
Engen entered Mauritius through the acquisition of Chevron’s interests in February 2011. It has quickly grown to be one of the most recognised brands in Mauritius by introducing new concepts such as, Quickshop and 24-hour service stations. It has a network of 35 service stations, with seven sites operating on 24/7 basis and nine sites with convenience offering.
Vivo Energy operates in Retail, Commercial Fuels, Marine and Aviation, LPG and Lubricants in Mauritius. The Shell brand has been present in Mauritius since 1905. It has 51 stations in Mauritius.
Source: Vivo Energy
