French-owned oil and gas giant Total has completed the acquisition of Gulf Africa Petroleum Corporation's assets in three East Africa markets in bid to strengthen its grip on the region.
The oil marketing company, whose Kenya's subsidiary Total Kenya enjoys a leading market share, yesterday announced it has concluded the acquisition of Gulf Africa assets, trading as Gapco, in Kenya, Uganda and Tanzania.
The principal assets being acquired are two logistics terminals in Mombasa, Dar es Salaam and a retail network of more than a hundred service stations.
Total struck a multi-billion-shilling deal to buy Gapco, one of Kenya's largest petroleum importer, in a transaction estimated to be worth $400 million (about Sh41.22 billion). The firm, however, did not disclose the final figure yesterday.
âIn combination with its (Gapco) existing operations in Kenya, Uganda and Tanzania, these assets will strengthen Totalâs logistics in the region and significantly accelerate the growth of its retail network there, especially in Tanzania,â Total said in a statement.
The oil major said priority will be to merge Gapcoâs assets and operations with Totalâs in the three countries, and to foster business and synergies.
The deal will now see the firm enjoy the full economies of scale in downstream and upstream sectors, riding on the massive assets of Gapco.
The Petroleum Institute of East Africa quarter four 2016 (October-December) shows its Total Kenya subsidiary was the countryâs leading petroleum sales company, enjoying a 16.7 per cent market share.
Gapco was the leading importer under the countryâs Open Tender System, with a 20.4 per cent market share.
Between January and September 2016, Total topped as the leading re-seller for petroleum products in the country with a 6.9 per cent market share, followed by Gapco which enjoyed a 6.8 per cent share.
âThe highly professional, skilled and engaged teams at both companies will ensure the transaction is a success,â it said.
Total which has presence in more than 140 countries worldwide is not new to acquiring oil businesses. It acquired Elf Oil Kenya and Chevron Kenya Ltd (Caltex) in 2000 and 2009, respectively.
The acquisition of Gapco marks the exit of Indian tycoon Mukesh Ambani from the local fuel market. Ambaniâs Reliance Exploration and Production DMCC (âREP DMCCâ) owned a majority stake of 76 per cent in Gapco, a holding company incorporated in Mauritius, jointly owned together with Fortune Oil Corporation Mauritius.
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