•Combined, the group will have over 3,900 service stations and more than two billion litres of storage capacity across 27 African countries.
•With the merger Vivo Energy Kenya, is looking to boost on the Sh25.964 billion jump in revenues witnessed last year.
Image: FILE
Vivo Energy, which owns the Shell franchise in Kenya, and Engen, have announced a combination of their respective African business to create one of the continent's largest energy distribution companies.
Combined, the 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 South Africa.
The move is likely to further strengthen Vivo's business in Kenya where it is the market leader, commanding a market share of 23.83.
It is followed by Total Energies at 17 per cent.
In the deal, the Malaysia’s gas station chain Engen will sell 74 percent of its stake at an undisclosed amount to Vivo, with the transaction currently pending regulatory approvals.
“Engen and Vivo Energy are pleased to announce a combination of their respective African businesses to create one of Africa’s largest energy distribution companies,” Vivo said in a statement.
With the merger, Vivo Energy Kenya is looking to boost the Sh25.964 billion jump in revenues witnessed last year.
Engen has around 1,300 service stations across seven African countries while 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.
Vivo Energy CEO Stan Mittelman said the completion of the transaction will be a step change in the company’s growth in South Africa and other important markets.
“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,” said Mittelman.
Local oil marketers have been on an expansion spree and acquisitions in the last two years, in an effort to beat competition.
Firms including Ola Energy and the French-owned Rubis have also stepped up their expansion in recent times.
Data by the Petroleum Institute of East Africa shows that the four oil majors increased their dominance of fuel sales, with a combined share of 62.47 per cent in 2022, from 53.4 per cent.
According to Kenya's energy sector regulator-Energy and Petroleum Regulatory Authority (EPRA), there were 111 registered Oil Marketing Companies and approximately 4,373 retail stations in Kenya, as at June 2022.
Kenya uses 165.45 million litres of super petrol every month, 220.57 million litres of diesel, and 11.26 million litres of kerosene.
Vivo Energy, Total and Rubis continued to dominate the market with 23.8 per cent, 17.3 per cent and 10 per cent market share, respectively.
Other key players were Ola Energy, Oryx, Be Energy, Tosha Petroleum, Galana Oil, Hass Petroleum and Gapco.
Rand Merchant Bank (a division of FirstRand Bank Limited) and Standard Bank advised Vivo Energy.
Morgan Stanley and Rothschild & Co are advisors to PETRONAS the (mother company of Engen) on the transaction.