A unit of Vitol Group agreed to acquire Petroliam Nasional Bhd’s 74% stake. to Engen Ltd., South Africa’s largest chain of fuel stations, forming a continent-spanning retailer.
Vivo Energy’s acquisition of a controlling stake in Malaysia’s national oil company Engen will help the energy trader form a group with 3,900 service stations in 27 African nations, the companies said in a statement set on Thursday They did not disclose financial details. The bet was expected to attract bids of about $2 billion, Bloomberg News reported last year.
“We’re looking for opportunities downstream because it’s clearly a good fit for the core business of what Vitol does,” Vitol chief executive Russell Hardy said in an interview at Engen’s headquarters in Cape Town. “It’s that Africa is a growing continent and expected to have solid GDP growth and solid transport growth, makes it more of a target compared to a country that’s likely to be full of Teslas from here to 10 years”.
Petronas, which has been exploring sale options for several years, first acquired shares in Engen in 1996 and became its majority shareholder two years later. The company has around 1,300 service stations in seven African countries.
The acquisition “will be a step change in our growth and represents a significant commitment to the South African market,” Vivo CEO Stan Mittelman said in the statement. The company has more than doubled in size since its inception in 2011.
According to Mittelman, the merged companies will represent the second largest fuel retailer in Africa behind TotalEnergies SE. The French major has 4,700 stations, according to its website.
The companies’ CEOs declined to comment on the price of the deal.
Phumbani, a South African investment company founded by the former chief executive of MTN Group Ltd. Phuthuma Nhleko, will remain a 21% shareholder in the South African business.
Morgan Stanley and Rothschild & Co. they advised Petronas on the sale. Rand Merchant Bank and Standard Bank Group Ltd. they advised Vivo.
–With help from Loni Prinsloo and Archie Hunter.
