The competition watchdog has approved the sale of an additional 20 per cent stake in Vivo Energy owned by petroleum giant Shell to Dutch firm Vitol, paving the way for Shell’s complete local exit and majority ownership by the buyer.
Anglo-Dutch firm Shell announced last December the intention to sell off its remaining stake in the Kenyan unit for Sh25.5 billion ($250 million), making full exit after the process kicked off in 2011.
“The Competition Authority of Kenya (CAK) has approved the proposed acquisition of 19.91 per cent of the shareholding in Vivo Energy Holdings from Shell Overseas Investments by Vitol Africa … the transaction will not affect competition negatively; and is unlikely to lead to any negative public interest issues,” said CAK director general Wang’ombe Kariuki in the gazette notice.
The sale will see Vitol hold 60 per cent of Vivo, while PE fund Helios Investment partners will own the remaining 40 per cent. Vivo Energy has been holding the Shell franchise in 16 African markets.
The conclusion of the deal will coincide with Vivo’s search for a new chief executive officer after last week’s departure of Polycarp Igathe to join politics as a running mate of Gidion Mbuvi ‘Sonko’ in the race for Nairobi governorship.
In the Kenyan market, Vivo was ranked second last year with a 16.6 per cent slice, behind Total’s 16.7 per cent and ahead of Kenol Kobil at 15.2 per cent and Gulf’s 8.5 per cent.
Shell’s exit continues a trend of Western multinationals quitting the Kenya (and Africa) downstream oil market in recent years. These include US majors Chevron (Caltex) and Exxon Mobil (Esso and Mobil), British giant BP and Italian firm Agip.
French company Total took over the assets of Chevron when the US firm exited the Kenyan market in 2008 and is the only majors operating locally.
The exit of these majors has sled to the rise of local oil marketers— a mix of larger players and small independent sellers.