Competition Authority of Kenya has allowed Vivo Energy to acquire Engen International Holdings and its 15 petrol stations across the country. The Netherlands-based company will therefore acquire 100 percent of the issue share capital of the Mauritius-based Engen.
In a statement on Tuesday, the authority said it analysed and permitted the transaction as the two companies are involved in the importation and sale of petroleum products. The agency said it considered relevant markets by looking at traffic flow patterns, retail outlets, distances between stations and transportation means.
"Geographical location was an important element because it would result in serious anti-competition consequences, denying consumers choice in given areas," Director General Wang'ombe Kariuki said. He added that the transaction was unlikely to lessen or prevent competition in the participation of oil marketers in the industry since it was an open bid process.
An analysis by the authority concluded that 13 of Engen's local markets did not show likelihood of raising the competition concern if the transaction was approved. The distance between the acquiring party's stations and target's stations is significant enough, at least 3km apart, according to the CAK. The authority also stated that the close proximity of Total and Kenol Kobil will offer vital competitive restraint.
Upon completion of this transaction, over 300 Engen-branded service stations in Africa will be added to Vivo Energy’s network, taking its total presence to over 2,100 service stations across 24 African markets. Engen CEO Yusa Hassan said: “Engen is excited to enter into this strategic undertaking with Vivo Energy, which is clearly aligned with our growth aspirations in Africa.
We will seek to build on each other’s strengths from this collaboration for the benefit of our customers across the continent.” In 2017, Vivo Energy acquired Engen's assets in nine countries in Africa including Kenya. Vivo Energy trades in Kenya under the Shell brand.