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The Namibian Competition Commission (NaCC) has granted Vitol Emerald Bidco Proprietary Limited (VEB) conditional approval to acquire Engen Limited. This, however, comes with conditions to address competition concerns and potential negative impacts on employment.
The Namibian Competition Commission (NaCC) has granted Vitol Emerald Bidco Proprietary Limited (VEB) conditional approval to acquire Engen Limited. This, however, comes with conditions to address competition concerns and potential negative impacts on employment. The merger, identified as an international transaction, involves VEB acquiring 74% of Engen’s entire issued share capital, thereby securing sole control over the company.
The competition analysis conducted by NaCC raised concerns about the potential prevention or substantial lessening of competition resulting from the merger. To address these concerns, the Commission has imposed specific conditions on the approval.
VEB is part of the Vitol Group and specialises in energy marketing and trading, dealing primarily in crude oil, petroleum products and natural gas with a history dating back to its founding in 1966. Engen is an Africa-based energy group that focuses on petroleum product marketing and distribution through a network of service stations.
The merged entity is required to divest the Divestiture Business within the First Divestment Period. This divestment is to be made to a Namibian-owned undertaking or consortium with less than 10% fuel retail market share, excluding those with pre-existing relationships with the merged entity. NaCC warns that failure to divest in the First Divestment Period triggers a Second Divestiture Period, and if divestment is not achieved even after this, termination of retail supply agreements with undivested service stations may follow.
Furthermore, the merged entity is prohibited from supplying fuel to divested service stations for a period of five years after divestment. Another critical condition is the prohibition of the merged entity, its shareholders, and special purpose vehicles from acquiring service stations or retail licences during the divestment period. The conditions set forth by the Commission aim to ensure that the merger does not result in anti-competitive effects and minimises negative impacts on the labour market.
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In Namibia, the Vitol Group operates through Validus, engaged in the trading, import, and distribution of refined petroleum products, and Vivo Namibia, focusing on marketing and distributing petroleum products under its Shell-licensed brand.
