A premier Africa-focused private investment firm, Helios Investment Partners LLP and trading commodities company, Vitol Group, are set to buy Shell’s 20 percent equity in Vivo Energy. This $250 million deal is expected to be complete in the first half of 2017 though it is subject to regulatory approval.

“We have played a key role in supporting Vivo Energy in its mission to create Africa’s most respected energy business. Shell is selling its remaining minority stake in the business while at the same time renewing the brand agreement that has contributed to Vivo’s success across the continent,” said Tope Lawani, Co-founder and Managing Partner, Helios Investment Partners.

Vitol and Helios Investment each own a 40 percent stake in the Vivo Energy, while Shell owns 20 per cent. Following the acquisition, Vivo will now be 100 percent owned by Helios and Vitol.

This move will see 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 — these have proved more lucrative. The multinationals that have exited Africa since 2011 include Agip, Beyond Petroleum Plc (BP), Caltex (Chevron), Esso and Mobil.

It would be recalled that in 2011 Shell announced that it would exit all African operating markets—except Egypt and South Africa—as well as cease some exploration activities.

What you need to know about this deal

With this deal, Vivo will continue to operate under the Shell brand. A long-term brand license agreement has been renewed with Vitol to ensure that the Shell brand will remain visible in more than 16 countries across Africa. Vivo Energy will pay loyalties to Shell for using the Shell brand.

What you didn’t know about Vivo Energy

  • Vivo Energy is the company behind the Shell brand in Africa. Helios, Vitol, and Shell created the company in 2011 when Shell divested its majority share in its downstream operations in 16 African markets.
  • It is present in Kenya, Uganda, Mali, Botswana, Burkina Faso, Cape Verde, Ghana, Guinea, Ivory Coast, Tunisia, Namibia, Madagascar, Mauritius, Morocco, Mozambique, Senegal, and Western Sahara.
  • Its retail network has grown from 1,300 to over 1,700 stations; expanded in the 16 countries.
  • It was established to distribute and market Shell-branded fuels and lubricants.

What you didn’t know about Helios and Vitol

Helios manages about $3 billion in sovereign wealth funds, corporate and public pension funds, endowments and foundations, funds of funds, family offices, and development finance institutions across the globe. Vitol is energy and commodities firm trading over six million barrels of crude oil per day and refined products globally.

Comments

Elsewhere on Ventures

Triangle arrow