JV buys BP and Shell Zim

A joint venture between Engen Petroleum, South Africa's leading refined petroleum products company, and KenolKobil, the largest indigenous African petroleum marketing company in east and central Africa, has signed a sale and purchase agreement to buy all the shares in Shell Zimbabwe and BP Zimbabwe.

Tania Landsberg, an Engen spokeswoman, said on Friday that the value of the transaction was subject to a confidentiality agreement.

The acquired entities were previously operated by BP on behalf of a joint venture that marketed its products under both the BP and Shell brands in Zimbabwe.

They are the best developed assets in the oil industry in Zimbabwe, consisting of more than 75 service stations spread across the country and several depots located in Harare, Bulawayo, Mutare, Gweru and other major towns.

The transaction is still subject to a number of suspensive conditions, including approval by the relevant Zimbabwean authorities.

Jacob Segman, the group managing director and chairman of KenolKobil Group, said the acquisition was in line with the group's "move south expansion strategic plan". In line with its vision, entry into Zimbabwe was a stepping stone as the company sought to venture into other countries in southern Africa, he said.

Rashid Yusof, the chief executive and managing director of Engen, said the venture strengthened Engen's existing interests in Zimbabwe and reaffirmed the confidence it had in the country's future.

Segman said although Zimbabwe's economy had declined sharply over the past decade, it still boasted good infrastructure and the joint venture believed this would form the basis of renewed economic growth under the new government of national unity.

Engen and KenolKobil expressed confidence that in pooling the skills, experience and knowledge they had built up in Africa, they would be able to transform and grow the Zimbabwean business so that it became a catalyst in the recovery of Zimbabwe's economy.

The two companies said the intention of the new joint venture was to grow the business to at least its former levels of market penetration with the full support and engagement of the current employees, the Zimbabwean government and other stakeholders.

Source: BusinessReport, Monday, September 14, 2009.