Engen and Vivo Energy have finalized their merger, with expansive growth plans for South Africa.
This week, Vivo Energy successfully acquired Petronas’ 74% stake in Engen, which it had held for over 25 years, forming a major pan-African petrochemical powerhouse.
With this merger, the Vivo Energy Group, now inclusive of Engen’s assets, operates over 3,900 service stations and holds more than two billion litres of storage capacity across 28 African markets.
The Phembani Group will maintain its strategic partnership with Engen as a long-standing B-BBEE collaborator and will continue as a 21% shareholder in the South African business.
“Following the announcement of the transaction in February 2023, all parties have been working diligently to secure regulatory approvals and meet conditions precedent across the seven markets where Engen operates,” stated Engen on May 21.
“These have now been completed with conditions.”
A New Pan-African Energy Leader
The Vivo Energy Group plans to adopt a “business as usual” approach with Engen service stations to prevent disruptions for customers, partners, suppliers, and employees.
However, the focus will be on providing “added value and benefits” to customers and stakeholders.
As part of the merger, Vivo Energy is establishing a new 5% employee share ownership program, resulting in 26% ownership of Engen South Africa by historically disadvantaged persons.
Additionally, Vivo Energy has pledged substantial capital investment to sustain and expand Engen’s operations in South Africa.
The company will also integrate renewable solar power generation into its operations, supporting the country’s just energy transition.
“The merger of Vivo Energy and Engen to create a pan-African champion not only benefits customers in South Africa and across the continent but also aligns with our vision to be Africa’s leading and most respected energy business,” said Chris Bake, Chairman of Vivo Energy.
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