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Thursday / 20 June 2024
HomeNewsEngen’s new owner has big plans for South Africa

Engen’s new owner has big plans for South Africa

Engen and Vivo Energy have announced the completion of their merger, with big expansion plans on the cards for South Africa.

Vivo Energy this week completed its purchase of Petronas’ 74% stake in Engen which it held for over 25 years, thus creating a pan-African petrochemical giant.

As a result, the Vivo Energy Group, which now includes Engen’s assets, boasts over 3,900 service stations and more than two billion litres of storage capacity across 28 African markets.

The Phembani Group will continue its strategic association with Engen as its long-standing B-BBEE partner, and will remain invested as a 21% shareholder in the South African business.

“Following the announcement of the transaction in February 2023, all parties have been working hard to secure regulatory approvals and fulfilment of conditions precedent across the seven markets where Engen operates,” said Engen in a statement on 21 May.

“These have now been completed, with conditions.”

A pan-African energy giant

The Vivo Energy Group intends to follow a “business as usual” approach with Engen service stations going forward to avoid disruption to customers, partners, suppliers, and employees; however, it said that it will place a strong focus on delivering “added value and benefits” for customers and stakeholders.

As part of the merger, the company is creating a new 5% employee share ownership programme which will result in Engen South Africa being 26% owned by historically disadvantaged persons.

Furthermore, Vivo Energy has committed to invest a significant amount of capital expenditure to maintain and grow Engen’s operations in South Africa, as well as to integrate renewable solar power generation into its operations in support of the country’s just energy transition, it said.

“The combination of Vivo Energy and Engen to create a pan-African champion not only benefits customers in South Africa and across the continent, but also sets up the new Group to achieve its vision to be Africa’s leading and most respected energy business,” said Chris Bake, Chairman of Vivo Energy.

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