Anglo Dutch petroleum giant Shell has sealed a deal to sell its remaining 20 per cent shareholding in Vivo Energy for $250 million (Sh25.5 billion) to Dutch firm Vitol Group, after getting approval from regulators.
Shell said in a press statement the transaction has been given regulatory approval paving the way for its planned pullout from the African oil retailing business that started in 2011.
“Shell has completed the sale of its 20 per cent interest in Vivo Energy Holding B.V. to Vitol Africa B.V. for a total amount of $250 million (Sh25.5 billion),” it said in a Wednesday release.
“Completion of the transaction follows regulatory approval and is consistent with Shell’s strategic commitment to focus downstream activity in areas where it can be most competitive.”
The sale was announced last December when Shell signed an agreement to divest its interest in the Vivo Energy.
Vivo Energy — which has been the Shell licensee in 16 African markets — was a joint venture between Vitol Group, a Dutch firm, Helios Investment Partners, an African private investment firm, and Shell.
Vitol will now own a 60 per cent stake in Vivo, leaving Helios Investment with a 40 per cent stake in the firm. Shell had held a 20 per cent stake.
Vivo Energy operates in Kenya, Botswana, Burkina Faso, Cape Verde, Ghana, Guinea, Ivory Coast, Mali, Mauritius, Madagascar, Morocco, Mozambique, Namibia, Senegal, Tunisia and Uganda.
It was established on December 1, 2011 to distribute and market Shell-branded fuels and lubricants. Shell announced in 2011 it would exit all African operating markets — except Egypt and South Africa — as well as cease some exploration activities.
“The sale is in line with Shell’s strategy to concentrate on its downstream operations where it can be most competitive,” Shell said earlier. Shell however said its brand will be retained by Vivo in the retailing business.
But for using the Shell brand, Vivo Energy will pay loyalties to Shell.
The move to offload its remaining shareholding has seen Shell follow in the footsteps of other global energy giants which have been divesting from the downstream oil business in Africa and other markets to concentrate more on the upstream business which involves exploration, drilling and supply — which has proved more lucrative.