Engen Petroleum Ltd., a unit of Malaysia’s Petroliam Nasional Bhd, completed the acquisition of Chevron Corp.’s assets in Malawi, Zambia and the French territory of Reunion.
The deal gives Engen, South Africa’s largest fuel retailer, an additional 72 filling stations and bulk storage facilities in the three countries, the Cape Town-based company said in a statement today. Engen hopes to get regulatory approval to buy Chevron’s assets in Zimbabwe, Mozambique, Tanzania and Mauritius by early next year.
“It’s a significant acquisition for us,” Wayne Hartmann, general manager of Engen’s international business unit, told reporters in Cape Town, while declining to specify the value of the deal. “It is generally cheaper and more effective to make acquisitions than to build a network yourself.”
Engen has been expanding in Africa for the past four years to grow its share of the petroleum retail market while Chevron is exiting retail activities to focus on oil and gas production. Engen first announced plans to buy the assets on Sept. 2.
Engen also wants to expand in Kenya, Uganda, Ghana and Nigeria and will consider further acquisitions “if opportunities come up,” Hartmann said. “Operating in developing markets is higher risk. The expectation of our shareholders is that we will deliver higher returns as a result.”