Engen and Vivo Energy have merged their respective African businesses in a bid to create one of Africa’s largest energy distribution companies.
The combined group will have over 3,900 service stations and more than two billion litres of storage capacity across 27 African countries.
Engen is the clear market leader in South Africa with about 1,300 service stations across seven African countries while Vivo Energy on the other hand is a major pan-African retailer and distributor of fuels and lubricants to retail and commercial customers, with over 2,600 service stations across 23 African countries using the Engen and Shell brands.
A release issued yesterday from Cape Town, South Africa and copied to GraphicOnline further noted that “PETRONAS will sell its 74 per cent shareholding in Engen to Vivo Energy at completion.
The Phembani Group, PETRONAS’ long-standing partner in Africa and Engen’s B-BBEE shareholder, is continuing its strong association with Engen and will remain invested as a 21 per cent shareholder in the South African business.”
The transaction is expected to further benefit employees of Engen through a newly implemented five per cent employee share ownership programme, resulting in Engen South Africa being 26 per cent owned by previously disadvantaged parties.
The CEO of Vivo Energy, Stan Mittelman, was quoted in the release as saying that; “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 further explained that Vitol’s acquisition of 100 per cent of Vivo Energy last year brings more opportunity to grow even faster adding that; “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.”
The Managing Director and CEO of Engen, Seelan Naidoo on his part 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.
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.”
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