Malaysia’s national oil and gas company Petronas has reached agreement to sell its entire 74% majority stake in South Africa’s Engen to Vivo Energy, one of the largest African fuel retail operators and part of multinational energy company Vitol.
“While Petronas’ decision to step back and reshape its portfolio is driven by evolving business priorities, we fully appreciate Engen’s potential and acknowledge that this is a necessary move forward to further accelerate its growth,” said Petronas chief executive, Tengku Muhammad Taufik.
“For almost three decades, Engen has been an important part of the group’s business portfolio. Recognising the company’s long and illustrious 140-year history, Engen’s strength and capabilities have continued to grow as an award-winning, customer-focused market leader in South Africa.
“With a strong foundation in place, we believe Vivo Energy will not only maintain sound operations for Engen, but also help steer the company through its next phase of growth.
Petronas first acquired shares in Engen in 1996 and two years later became its majority shareholder.
Engen’s primary business is in the marketing of petroleum, lubricants and functional fluids; chemicals and retail convenience services.
It currently operates the largest retail footprint with some 1300 service stations across seven countries in Sub-Saharan Africa and the Indian Ocean islands.
The Phembani Group, Petronas’ long-standing partner in Africa and Engen’s Broad-Based Black Economic Empowerment (B-BBEE) shareholder, will remain a shareholder in Engen alongside Vivo.
Engen will continue to execute on its strategy and remains focused on maintaining operational and commercial excellence both during the pre-completion period, and under the stewardship of Vivo post-completion of this transaction, noted Petronas.
The company was advised by Morgan Stanley and Rothschild & Co. on the transaction, which is subject to customary conditions precedent including regulatory approvals.