Shell and Engen to merge

Vivo Energy Namibia has announced that Petronas will sell is 74% shareholding in Engen to Vivo Energy.Vivo Energy Namibia was established in October 2012 after the acquisition of Namibia’s downstream business from Shell, and as a franchisee continues to operate 71 service stations across the country, retailing up to 403 million litres at total volume capacity, and dominating the local market, according to its website.Engen can trace its roots in Namibia back to 1897, when the Vacuum Oil Company started servicing the whaling fleet operating out of Walvis Bay. Engen now operates around 60 service stations around the country, with about half of them complete with Quick Shops.The ministry of mines and energy lists Engen among major players in the downstream oil business in the country, along with Puma Energy Namibia, Total Energies Namibia, the parastatal Namcor, and Vivo Energy Namibia.According to the Namibian Competition Commission, Vivo Energy Namibia has not yet submitted any application to have the merger approved locally. However according to the office of the chief executive officer at the commission, they will have to. “They have to come through us,” a source in the CEO’s office told My.Na Cars.Meanwhile Vivo Energy was pleased to announce the combination of operations in Cape Town, South Africa on 9 February 2023. They aim to create one of Africa’s largest energy distribution companies, according to a press release.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 market leader in South Africa and has around 1 300 service stations across seven African countries. Vivo Energy 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.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% shareholder in the South African business, the press release elaborates.The transaction will further benefit employees of Engen in South Africa, through a newly implemented 5% employee share ownership programme, resulting in Engen South Africa being 26% owned by previously disadvantaged parties.Stan Mittelman, CEO of Vivo Energy said: “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 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.”Phuthuma Nhleko, Chairman and Co-founder of Phembani Group said: “The Phembani Group is proud to have been a long-term shareholder in Engen since 1999, partnering with PETRONAS and helping to grow Engen into a valuable South African corporate citizen, meeting the needs of millions of ordinary South Africans. We are pleased to partner with Vivo Energy in the next phase of Engen’s growth. We are confident that together we will support Engen’s continued growth, enabling it to realise its vision.”Chris Bake, Chair of Vivo Energy said: “Vivo Energy has been a success story since its inception. It has grown consistently, both organically and by investing in modern quality assets. It has a highly professional and capable management team with a deep understanding of Africa’s unique energy requirements. Engen is South Africa’s market-leader and this powerful combination will benefit customers in South Africa and across the continent.”The transaction is currently pending regulatory approvals and fulfilment of conditions precedent.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.

Shell and Engen to merge

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Namibian Sun 2024-11-20

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Shell and Engen to merge

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Namibian Sun 2024-11-20

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