Vivo Energy and Engen have announced the completion of a landmark transaction, resulting in PETRONAS selling its 74% shareholding in Engen to Vivo Energy.
This strategic move aims to establish a Pan-African energy powerhouse, combining the strengths and resources of both entities to better serve the African market.
The newly combined Vivo Energy Group now boasts an impressive network of over 3,900 service stations and more than two billion litres of storage capacity across 28 African markets. However, the deal will not affect Engen’s operations in Ghana, ensuring continuity and stability in that market.
Engen’s long-standing Broad-Based Black Economic Empowerment (B-BBEE) shareholder, the Phembani Group, continues its strategic association with Engen and will remain a 21% shareholder in the South African business.
Additionally, a new 5% employee share ownership programme is being created, resulting in Engen South Africa being 26% owned by historically disadvantaged persons. This move aligns with South Africa’s ongoing efforts to promote economic inclusion and empowerment.
Regulatory Approvals and Conditions
Following the announcement of the transaction in February 2023, all parties worked diligently to secure regulatory approvals and fulfill conditions precedent across the seven markets where Engen operates. These prerequisites have now been successfully completed, allowing the transaction to proceed without further delay.
In a joint statement, Stan Mittelman, CEO of the Vivo Energy Group, and Seelan Naidoo, Managing Director and CEO of Engen, expressed their enthusiasm about the merger. “We are delighted to conclude the transaction, and will now work together to take the ‘best of both’ from Engen and Vivo Energy, positioning the combined organisation well for growth and success in the years to come,” they said.
The enlarged Vivo Energy plans to maintain a ‘business as usual’ approach for customers, partners, suppliers, and employees, only making changes that add value. This strategy is intended to ensure a smooth transition and continuity of services, while enhancing the value provided to stakeholders.
Mittelman and Naidoo also highlighted Vivo Energy’s commitment to significant capital expenditure to sustain and expand Engen’s operations in South Africa. This includes major investments in renewable solar power generation projects, supporting a just energy transition and modernising the business for the benefit of the South African population.
Strategic Partnership with Phembani Group
Phuthuma Nhleko, chairman and co-founder of Phembani Group, expressed excitement about continuing the strategic relationship with Vivo Energy. “Having been invested in Engen since 1999, we are excited to continue our involvement, partnering in a strategic relationship with Vivo Energy in the next phase of Engen’s growth as a key player in South Africa’s economy,” he stated.
Chris Bake, Chairman of Vivo Energy, thanked PETRONAS for its stewardship of Engen over the past 25+ years.
“Together with the Phembani Group, they have grown Engen into a valuable corporate citizen. The combination of Vivo Energy and Engen to create a Pan-African champion not only benefits customers in South Africa and across the continent but also sets up the new Group to achieve its vision to be Africa’s leading and most respected energy business.”
Chris Bake
Meanwhile, the Vivo Energy Group operates and markets its products in countries across North, West, East, and Southern Africa. The newly extended Group’s network of over 3,900 service stations operates under the Engen and Shell brands and exports lubricants to several other African countries. Its retail offerings include fuels, lubricants, card services, convenience stores, restaurants, and other non-fuel services.
Vivo Energy provides fuels, lubricants, liquefied petroleum gas (LPG), and chemicals to business customers across various sectors including marine, aviation, mining, construction, power, transport, agriculture, and manufacturing. The company continues to develop innovative energy solutions to enhance sustainability.
With around 6,000 employees and access to over 2.1 billion litres of fuel storage capacity, Vivo Energy is well-positioned to meet the growing energy demands across Africa. The merger marks a significant step towards consolidating the energy sector and driving economic growth and development across the continent.
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