Engen and Vivo Energy have announced the completion of the transaction to combine these respective businesses, with Petronas selling its 74% shareholding in Engen to Vivo Energy.
In the announcement made today, the parties said this transaction was creating a pan-African energy champion.
The combined Vivo Energy Group now has over 3 900 service stations, and more than two billion litres of storage capacity across 28 African markets.
In a joint statement, Vivo Energy Group CEO Stan Mittelman, and Engen managing director and CEO Seelan Naidoo, said:
“We are delighted to conclude the transaction, and will now work together to take the ‘best of both’ from Engen and Vivo Energy, positioning the combined organisation well for growth and success in the years to come.”
As part of the transaction, Vivo Energy had committed to invest a significant amount of capital expenditure to maintain and grow Engen’s operations in South Africa, ensuring a modern and efficient business, for the benefit of the local population.
“We have also committed to major investments in renewable solar power generation projects to help transform the economy, while supporting a just energy transition for the country.”
The Phembani Group, Engen’s long-standing B-BBEE shareholder, was continuing its strategic association with Engen and would remain invested as a 21% shareholder in the South African business.
A new 5% employee share ownership programme was being created, resulting in Engen South Africa being 26% owned by historically disadvantaged persons.
Following the announcement of the transaction in February last year, all parties said they had been working hard to secure regulatory approvals and fulfilment of conditions precedent across the seven markets where Engen operated.
These had now been completed, with conditions.
Last month, The Competition Tribunal announced that it had approved the proposed merger wherein Vitol Emerald Bidco intends to acquire Engen, subject to a set of competition and public interest conditions.
Engen will remain incorporated and headquartered in South Africa, and remain a tax resident of this country.
Vitol will ensure a safe and dignified work environment for all employees in compliance with statutory health and safety standards.
Engen and Vivo Energy said the enlarged Vivo Energy would only make changes that add value, keeping a business as usual approach for customers, partners, suppliers, and employees.
The new organisation would continue to place a strong focus on delivering added value and benefits for customers and stakeholders.
Phembani Group chairman Phuthuma Nhleko said they were excited to continue their involvement, partnering in a strategic relationship with Vivo Energy in the next phase of Engen’s growth as a key player in South Africa’s economy, particularly having been invested in Engen since 1999.
Vivo Energy chairman Chris Bake thanked PETRONAS for its stewardship of Engen over the last 25+ years.
“Together with the Phembani Group, they have grown Engen into a valuable corporate citizen,” Bake said.
“The combination of Vivo Energy and Engen to create a pan-African champion not only benefits customers in South Africa and across the continent, but also sets up the new group to achieve its vision to be Africa’s leading and most respected energy business.”
BUSINESS REPORT