Vivo Energy and Engen Holdings have restructured the acquisition of Engen International Holdings by the former’s subsidiary, Vivo Energy Investments B.V. The restructuring process will enable the completion of the transaction.
According to Africa Business Communities, all regulatory requirements have been met for the transfer of Engen’s international operations in nine nations in Sub-Saharan Africa and still working on the transfer in DRC.
The deal will see Vivo acquire 10 Engen operations across Africa including Kenya where the two companies already have operations. The other countries include Rwanda, Tanzania, Malawi, Zimbabwe, Mozambique, Gabon, Kenya, DRC, and Zambia.
The transaction will be completed on 1 March 2019.
The Restructured Share Transaction
The restructured transaction will add more than 225 Engen-branded service stations to Vivo’s network and operations in eight new countries. The new additions will increase Vivo’s presence to more than 2,000 service stations in 23 countries across the African continent.
DRC is the only country the transaction has not been able to go through and Engen is discussing with the government to see it through.
Christian Chammas, CEO, Vivo Energy said:
“[The transaction] opens an important new chapter for Vivo Energy and we look forward to welcoming around 350 new employees, adding eight new countries to our network, and increasing our target market by nearly 150 million people to around 35 per cent of the African population. Importantly, our existing business remains on track to achieve our full year guidance and we continue to invest in and grow our existing operations.”
“In Vivo Energy’s first seven years we invested to grow our business, increasing our network and adding new and refurbished shops and quick service restaurant offers. We have an opportunity to replicate this successful business model to drive growth and profitability in our new markets and look forward to updating the market in the New Year on the scale of the opportunity ahead of us,” he added.
Yusa Hassan, Managing Director and CEO of Engen stated: “Engen is pleased with this transaction, which will enable the parties to proceed to completion on 1 March 2019. It aligns with our growth aspirations in Africa. We look forward to becoming a Vivo Energy shareholder, and adding another strong and well-respected brand to the Vivo Energy group.”
Transaction Protests
Earlier this year, Engen Kenya’s employees filed a claim in court to stop the transaction process citing fear of losing their jobs once the acquisition goes through.
Engen Holdings will continue holding its interest in its South Africa’s business and refinery as well as its businesses in Botswana, Namibia, Swaziland, Lesotho, Ghana, and Mauritius which are not included in the transaction.
