Vitol Group and private-equity firm Helios Investment Partners agreed to buy a majority stake in Oando Plc’s service station, fuel storage and supply business in West Africa for $276 million.
Their joint venture will acquire 51 percent of the voting rights and a 60 percent interest in Oando’s downstream unit, the two companies said Tuesday in a statement.
That includes more than 400 service stations in Nigeria, 84,000 metric tons of storage and liquefied petroleum gas operations.
The acquisition of Nigeria’s second-largest downstream fuels company follows the March election of Muhammadu Buhari as president of Africa’s biggest crude producer, with pledges to reform the oil industry.
It also builds on the partnership between Vitol, the world’s largest independent oil trader, and Helios that already includes a distributor of Shell-branded fuels and lubricants in 16 countries on the continent.
“This investment is a further reflection of our confidence in the Nigerian economy and will be independent of the services we provide to our long-standing Nigerian customers,” Ian Taylor, president and chief executive officer of Vitol, said in the statement.
Oando, which will hold 40 percent of the business, said in a separate statement that the transaction values the downstream operation at $461.3 million. The unit controls about 12 percent of the Nigerian market, Vitol said.
Growth Potential
Commodity traders including Vitol and Trafigura Beheer BV are targeting fuel storage and retail businesses in Africa, Europe and Australia to complement their crude and oil product trading operations.
Trafigura is the largest shareholder in Puma Energy, which has operations throughout Africa, including Angola, Ghana and the Democratic Republic of Congo.
Tope Lawani, co-founder and managing partner of Helios, which manages funds totaling more than $3 billion, said he expects the Oando business to benefit from strong economic growth in Nigeria. Africa’s biggest economy has annual fuel demand growth of three …Read More
Source:: New Mail
