HARARE – Malaysia-based firm Engen Holdings (Engen) has agreed to sell shares in one of its subsidiaries to fuel retailer Vivo Energy in exchange for a stake and a “possible” cash element.
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 new markets for Vivo Energy included in the transaction are DR Congo, Zimbabwe, Réunion, Zambia, Gabon, Rwanda, Mozambique, Tanzania and Malawi.
Engen’s Kenya operations — where Vivo Energy already operates — are also part of this transaction.
As part of the deal, Engen Holdings will retain its interest in Engen Petroleum Limited (the South Africa business and refinery) and Engen’s businesses in Mauritius, Botswana, Ghana, Namibia, Swaziland and Lesotho, which are not part of this transaction.
“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,” Vivo Energy chief executive Christian Chammas said.
“Today’s agreement with Engen which, subject to regulatory approval, will add a number of new African markets to our business so that we can offer high quality products and services to significantly more customers,” Chammas added.
Yusa Hassan, Engen managing director and chief executive said the energy company was 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”.
Currently with over 1 800 service stations across 15 African markets Vivo Energy sources, distributes, markets and supplies Shell-branded fuels and lubricants to retail and commercial customers across the continent.
Vivo Energy is jointly owned by the energy and commodities company Vitol and the Africa-focused private investment firm Helios Investment Partners.
Vitol chairperson and chief executive Ian Taylor said Africa is a very important part of its business and was committed to continue to invest across the continent.
“We are delighted to be entering this undertaking with Engen that will add 300 Engen service stations to Vivo Energy’s expanding footprint,” he said.
Tope Lawani, co-founder and managing partner of Helios Investment Partners, said: “This transaction underscores our commitment to Vivo Energy’s growth. It is consistent with our investment strategy of building market-leading, geographically diversified platform businesses across Africa.”