In a landmark move, Engen and Vivo Energy have announced the completion of their merger, setting the stage for significant expansion and development plans in South Africa.
Vivo Energy’s acquisition of Petronas’ 74% stake in Engen, held for over 25 years, has created a formidable pan-African petrochemical giant.
The newly formed Vivo Energy Group now encompasses Engen’s extensive network, boasting over 3,900 service stations and more than two billion litres of storage capacity across 28 African markets.
This merger cements the Group’s position as a leading player in the continent’s energy sector.
The Phembani Group will continue its strategic partnership with Engen, maintaining its role as a key B-BBEE partner with a 21% shareholding in the South African business.
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“Since announcing the transaction in February 2023, all parties have worked diligently to secure regulatory approvals and fulfil the conditions precedent across the seven markets where Engen operates,” Engen stated on May 21. “These have now been completed, with conditions.”
A New Era for Engen and Vivo Energy
Vivo Energy Group has assured that it will adopt a “business as usual” approach for Engen service stations to ensure no disruption for customers, partners, suppliers, and employees.
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Nevertheless, the Group emphasized its commitment to delivering enhanced value and benefits to its customers and stakeholders.
A significant highlight of the merger is the introduction of a new 5% employee share ownership programme, which will result in Engen South Africa being 26% owned by historically disadvantaged persons.
This move is part of Vivo Energy’s broader commitment to regional social and economic transformation.
In addition to these initiatives, Vivo Energy has pledged substantial capital expenditure to sustain and expand Engen’s operations in South Africa.
This investment will also include integrating renewable solar power generation into its operations, aligning with the country’s goals for a just energy transition.
“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.
This merger heralds a promising future for the energy sector in South Africa and beyond, with Vivo Energy and Engen at the forefront of innovation, sustainability, and growth.