Shell, Vitol and Helios reach agreement on African downstream businesses
Shell today announced it has agreed to divest the majority of its shareholding in most of its downstream businesses in Africa to Vitol and Helios Investment Partners for a total consideration of some $1 billion. Under the agreements, Shell will retain equity in two new joint venture companies, which will assure continued availability of Shell fuels and lubricants in 14 African countries under the Shell brand.
“This is a good deal for our customers as well as for Shell,” said Mark Williams, Royal Dutch Shell’s downstream director. “We will significantly reduce our capital exposure in line with our strategy to concentrate our global downstream footprint, and continue to provide the high quality Shell products that our African customers have come to trust and rely on over many decades.”
“We are delighted to have concluded this agreement with Shell and Helios,” said Ian Taylor, CEO of the Vitol Group. “Africa is a continent we know well. These two new ventures allow us to invest in Africa and its fast-growing economies, and grow all the businesses under the umbrella of the world-class Shell brand for the benefit of our customers.”
One joint venture will own and operate Shell’s existing oil products, distribution and retailing businesses in 14 African countries, with the potential to add five more in future. Vitol and Helios will hold 80% of the venture and Shell will hold the remaining 20%. A separate company, which will be 50% owned by Shell and 50% by Vitol and Helios, will own Shell’s existing lubricants blending plants in seven countries and will manage macro-distributor relationships in each of the countries where the main venture operates, plus a number of others.
Shell, Vitol and Helios will now concentrate on securing necessary regulatory approvals and integration planning, ahead of a phased completion of the proposed deal during 2011 and the first half of 2012.
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