Source: Vivo acquires Engen | Daily News
VIVO Energy Plc (Vivo) has concluded the takeover of Engen Holdings (Engen) operations in a number of countries including Zimbabwe in a transaction worth $62 million.
The transaction also involved an issue by Vivo of 63,2 million new shares, resulting in Engen holding a circa 5,0 percent shareholding. Christian Chammas, the Vivo chief executive officer, said the transaction adds operations in eight new countries and 230 Engen-branded service stations to Vivo Energy’s network, taking its total presence to over 2 000 service stations, across 23 African markets.
“The new markets for Vivo Energy are Gabon, Malawi, Mozambique, Reunion, Rwanda, Tanzania, Zambia and Zimbabwe. Engen’s Kenya operation, where Vivo Energy already operates is the ninth country included in the transaction,” he said.
Vivo is a downstream petroleum company with its headquarters in Netherlands. It is the company behind the Shell brand in Africa and is jointly owned by Vitol, Helios Investment Partners and Shell. In 2014, Engen Zimbabwe had 55 service stations. In December 2017, Vivo agreed to buy the operations of Engen in 10 African nations.
Chammas said the cash element of the consideration was funded by a draw down on Vivo Energy’s multi-currency facility. He added that on the basis of information provided by Engen, Vivo believes that the 2018 financial performance of the target group will be similar to 2017. “Increased fuel volumes, driven by the commercial segment, are expected to have been offset by lower margins,” Chammas said.
He noted that in Vivo’s first seven years, the company invested to grow the business, increasing service station network and adding new and refurbished convenience retail and quick service restaurant offers.
“We have an opportunity to replicate this successful business model to drive growth and profitability in our new markets. We must seize this in order to benefit all our customers, deliver value for our shareholders, and move closer to achieving our goal of becoming Africa’s most respected energy business,” Chammas said.