Shell petrol station attendants serve customers. Vivo energy intends to
acquire Engen Oil’s assets to spread its business across the continent.
PHOTO | NATION
Vivo Energy could control the regional oil retail market if the
competition agencies in Kenya, Rwanda and Tanzania approve its plan to
buy out Engen Oil’s assets in the region and seven in other
countries in Africa.
countries in Africa.
A week ago, through a notice to the Fair
Competition Commission (FCC) of Tanzania, Vivo sought approval of the
deal, which would give it a larger regional presence.
“The
FCC has received a merger notification to the effect that Vivo Energy
Holding BV, a company incorporated in The Netherlands, intends to
acquire entire shares in Engen Marketing Tanzania Ltd, a company
incorporated in The Commonwealth of the Bahamas with a registered branch
in Mainland Tanzania.
“FCC is currently investigating
the intended acquisitions in line with the provisions of the FCA and
the FCC Procedure Rules, 2013,” the Tanzania competition agency said in a
statement.
Three months ago, Vivo Energy said it
planned to acquire the South African Engen Oil’s assets in an
undisclosed amount, subject to regulatory approval.
“Upon
completion of this transaction, nine new countries and over 300
Engen-branded service stations will be added to Vivo Energy’s network,
taking Vivo Energy’s total presence to over 2,100 service stations
across 24 African markets,” the company said in a statement.
New markets
If
approved, Vivo Energy will be in new markets in the three EAC countries
and Zambia, Gabon, Mozambique, Malawi, DR Congo, Zimbabwe and the
Réunion Islands.
Currently, Vivo Energy holds the Shell
licence in 16 African markets and they are eyeing an initial public
offering on the London Stock Exchange to access new capital for growth
on the continent.
“In our first six years, our
shareholders have invested to grow Vivo Energy, increasing our network
from around 1,300 to over 1,800 service stations and adding over 400 new
and refurbished shops and quick service restaurant offers,” said Vivo
Energy chief executive officer Christian Chammas.
Engen
has been focusing on the downstream refined petroleum products market
and related businesses, with a presence across sub-Saharan Africa and
the Indian Ocean islands.
Its businesses in the region
revolves around the refining of crude oil, the marketing of primary
refined petroleum products and the provision of convenience services via
an extensive retail network.
“We are excited to enter
into this strategic undertaking with Vivo Energy, which is clearly
aligned with our growth aspirations in Africa. We will seek to build on
each other’s strengths from this collaboration for the benefit of our
customers across the continent,” said Engen managing director Yusa
Hassan.
Regional marketers
Other
regional oil marketers have also been increasing their footprint in the
region. Last June, Hass Petroleum Group sold a 40 per cent stake to an
Omani government oil company in a plan aimed at expanding its presence
in the region.
Though the value of the deal is yet to
be made public, Hass Petroleum said it plans to open 30 new fuel
stations by end of this year, taking its footprint to 90 across the
region and central Africa.
In the transaction, Oman
Trading International said it would invest the additional funding from
the transaction to enhance its market visibility through new
distribution assets specifically service stations across its key markets
in the region.
Hass is planning to use the new cash
injection to grow its competitive edge in the oil business in the
region. Part of the funds will also go into setting up of strategic
depots as well as competing in the open tender system used by oil
marketing firms to win bids to import oil in Kenya.
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