Engen to get new international owner
CAPE TOWN - Malaysia’s national oil company Petronas has agreed to sell its 74 per cent stake in Engen to Vivo Energy, a move that will create one of the continent’s largest distributors of fuel and lubricants.
Vivo Energy, owned by DutchSwiss commodities group Vitol Energy, owns 2 600 service stations across 23 African countries. It doesn’t operate in South Africa (SA), but elsewhere on the continent it owns service stations under the Engen and Shell brand. Four years ago, Vivo bought the Engen business in nine African markets.
Largest
Engen is the largest petrol station group in SA and has around 1 300 service stations across seven African countries.
The combined group will have more than two billion litres of storage capacity across 27 African countries. The parties didn’t disclose financial details, but Bloomberg reported in 2022 that the stake was expected to draw bids of about US$2 billion (R35.3 billion).
Petronas first acquired shares in Engen in 1996 and became its majority shareholder in 1998.
It said that it had decided to ‘step back’ and restructure its portfolio due to ‘evolving business priorities’.
The Phembani Group, the long-standing partner of Petronas in Africa and Engen’s B-BBEE shareholder, will remain invested as a 21 per cent shareholder in the SA business.
The new transaction will include a five per cent employee share ownership programme.
“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,” CEO Stan Mittelman said in a statement.
“Vitol’s acquisition of 100 per cent 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,” said Mittelman.
The transaction is currently pending regulatory approvals and fulfilment of conditions precedent. RMB and Standard Bank are the advisors for Vivo, while Morgan Stanley and Rothschild and Co. are advisors to Petronas in the transaction.