Oil company Engen Holdings’ operations in nine sub-Saharan African countries will be transferred to JSE-listed downstream petroleum company Vivo Energy on March 1, 2019.
The $203.9-million transaction will see Vivo’s retail service station network expand from 15 to 23 countries in Africa, making Vivo the largest Pan-African independent network, with more than 2 000 service stations.
Engen’s operations in Gabon, Malawi, Mozambique, Reunion, Rwanda, Tanzania, Zambia, Kenya and Zimbabwe, which include 225 Engen-branded service stations, will be transferred to Vivo.
Engen will retain its interest in Engen Petroleum – its South African business and refinery – and its businesses in Mauritius, Botswana, Ghana, Namibia, Swaziland and Lesotho.
Discussions are ongoing between the companies and country authorities around Engen’s operations in the Democratic Republic of Congo (DRC), which was initially part of the transaction, but has now been excluded.
Vivo CEO Christian Chammas noted during a media conference call on Tuesday that the Engen DRC operations will progress as a standalone deal, but it may take months for the government to approve the deal.
A value for this deal has not yet been determined.
Meanwhile, under the terms of the deal that was first announced in December 2017, Vivo will issue 63.2-million new shares valued at 165p apiece to Engen, which will result in Engen holding a 5% stake in Vivo.
Vivo will also pay Engen $62.1-million in cash.
Chammas said in a statement that the transaction will enable Vivo to welcome 350 new employees and increase its target market by nearly 150-million people (35% of the African population).