Vivo Energy and Engen have merged into a combined group to create one of Africa’s largest energy distribution companies that will have more than 3 900 service stations and more than two-billion litres of storage capacity across 27 African countries.

Oil and gas multinational Petronas will sell its 74% shareholding in Engen to Vivo Energy. The transaction is currently pending regulatory approvals and fulfilment of conditions precedent.

“Vivo Energy’s focus has been to invest to grow our business, and I am proud that we have more than doubled the size of our network since our formation in 2011. Four years ago, we acquired the Engen business in nine African markets, and have since worked to enhance and develop these.

"Vitol’s acquisition of 100% of Vivo Energy last year brings more opportunity to grow even faster,” says Vivo Energy CEO Stan Mittelman.

“Completion of this transaction, which reunites the Engen brand across Africa, will be a step change in our growth and represents a significant commitment to the South African market while enhancing Vivo Energy’s portfolio in other important markets,” he adds.

Engen has about 1 300 service stations across seven African countries, including South Africa. Vivo Energy is a major pan-African retailer and distributor of fuels and lubricants to retail and commercial customers, with more than 2 600 service stations across 23 African countries, using the Engen and Shell brands.

“This is an exciting opportunity for Engen to build on its market leading position in South Africa and a number of Southern African countries,” says Engen CEO and MD Seelan Naidoo.

“It allows us to leverage our strong brand equity, retail footprint, supply chain capability and customer service to be a key contributor to Vivo Energy and Vitol’s ambition to build a stronger and more successful pan-African energy champion. Engen is excited to become part of the enlarged business and this will set up our business to be stronger and more successful than ever before,” he notes.

Vivo Energy has been a success story since its inception, and has consistently grown organically and by investing in modern quality assets, comments Vivo Energy chairperson Chris Bake.

“[Vivo Energy] has a highly professional and capable management team with a deep understanding of Africa’s unique energy requirements and Engen is South Africa’s market leader. This powerful combination will benefit customers in South Africa and across the continent,” he adds.

Meanwhile, industrial holding company Phembani Group, which is Petronas' long-standing partner in Africa and Engen’s broad-based black economic empowerment shareholder, is continuing its strong association with Engen and will remain invested as a 21% shareholder in the South African business.

The transaction will benefit employees of Engen through a newly implemented 5% employee share ownership programme, resulting in Engen South Africa being 26% owned by previously disadvantaged parties.

“The Phembani Group is proud to have been a long-term shareholder in Engen since 1999, partnering with Petronas to grow Engen into a valuable South African corporate citizen that meets the needs of millions of South Africans,” Phembani Group chairperson and co-founder Phuthuma Nhleko says.

“We are pleased to partner with Vivo Energy in the next phase of Engen’s growth. We are confident that, together, we will support Engen’s continued growth, enabling it to realise its vision,” he notes.