Vivo seeks to increase footprint in East Africa
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.
“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.
“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.
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.
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.
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.