JOHANNESBURG: Petroliam Nasional Bhd’s South African unit Engen is in talks with Vivo Energy Holding BV to combine some of their African fuel-retail assets, according to two people familiar with the matter.
The deal would be worth as much as 3.5 billion rand (US$256mil), or about 20% of Engen’s equity value, said the people, who asked not to be identified as the negotiations are ongoing.
Engen, which is 26%-owned by South African investment group Phembani and some of its partners, could take a stake in Vivo, which operates stations under the Royal Dutch Shell Plc brand.
Spokespeople for Vivo and Engen didn’t respond to phone calls and emails requesting comment.
The deal will enable Engen to use the better-known Shell brand while both companies can generate savings by sharing distribution assets.
Engen has operations in 26 sub-Saharan African countries, while Vivo is the Shell licencee in 16.
Engen will retain sole control of its operations in South Africa, Botswana, Lesotho and Swaziland as well as an oil refinery in South Africa that has the capacity to process 135,000 barrels of oil a day.
Talks are advanced and could be concluded early next year, said one of the people. A final decision hasn’t yet been reached and the deal could still be called off.
Petronas bought Engen in 1998 in a deal that valued the company at about US$700mil before selling a stake to Phembani.
If a deal with Vivo goes ahead, Phembani would also take a stake in the Dutch company, said the people.
Vivo could then begin trading its shares on the London Stock Exchange in 2018. — Bloomberg
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!
What do you think of this article?