Vitol Agrees to Buy Rest of Vivo Energy in $2.3 Billion Deal

  • In Business
  • 2021-11-25 09:07:53Z
  • By Bloomberg

(Bloomberg) -- Trading giant Vitol Group agreed to buy Vivo Energy in a deal valuing the Africa-focused fuel retailer at about $2.3 billion.

Most Read from Bloomberg

  • Billionaire Family Feud Puts a Century-Old Business Empire in Jeopardy

  • Asia's Richest Man Looks to Walton Family Playbook on Succession

  • The 24-Year-Old Aiming to Dethrone Victoria's Secret

  • The Winners and Losers From a Year of Ranking Covid Resilience

  • An Arab City's Booming Art Scene Is Also a Grab at Soft Power

The transaction will bring Vivo assets back in house for the oil trader, which sold shares in the retailer in 2018 in what was one of the biggest initial public offerings on the London Stock Exchange that year. The offer shows Vitol is willing to spend to pursue growth and find outlets for its traditional fuels amid the energy transition.

Vitol, which owns 36% of Vivo, will pay $1.85 (139 pence) a share in cash for the rest, the trading house said Thursday. No. 2 investor and co-founder Helios Investment Partners also supports the deal, Vitol said.

Vivo jumped as much as 21% in London trading, the biggest intraday gain since April last year, and was up 20% at 133.8 pence as of 9:02 a.m. local time. The IPO had been priced at 165 pence a share.

Vitol is searching for areas of growth in its oil-trading business as Western consumers gradually shift to electric vehicles and cleaner fuels. The world's biggest independent oil trader handles more than 7 million barrels of crude and products a day.

"Fuels distribution and marketing in Africa remains a core activity for the Vitol Group," it said in a statement. "Vivo will benefit from Vitol's expertise and be better placed to pursue opportunities in a highly fragmented market."

The friendly deal with Vivo, which sells Shell and Engen-branded fuels and lubricants across more than 20 countries in Africa, represents one of Vitol's larger purchases. The trader recently invested $3.5 billion as part of a group buying 5% of Russia's Vostok oil field in the Arctic.

Earlier Bids

Thursday's documents reveal that this isn't the first takeover approach Vitol has made to Vivo's board. It offered $1.55 per share in February, but that was rejected by Vivo's independent directors. In September, Vitol made another bid and told Vivo that private equity firm Helios, with which it founded Vivo in 2011, had agreed to sell its 27.1% stake.

As Vitol already owned 36% and would soon control a majority of shares, Vivo's board held talks with the firm to "negotiate a fair value for the minority Vivo shareholders," according to the statement. Vivo's board has recommended shareholders vote in favor of the current offer.

Vitol, like many of its peers, has also stepped up investments in cleaner energy, spending more than $1 billion on solar, wind and other renewables assets, plus carbon capture. Yet traditional fuels still represent the lion's share of its business, which posted record profits of around $3 billion in 2020 amid wild swings in the price of oil.

(Updates with context of offer and previous bid beginning in eighth paragraph.)

Most Read from Bloomberg Businessweek

  • Medical Debt Is Crushing Black Americans, and Hospitals Aren't Helping

  • Wildfires Are Getting Worse, and One Chemical Company Is Reaping the Benefits

  • How Child Care Became the Most Broken Business in America

  • Boeing Built an Unsafe Plane, and Blamed the Pilots When It Crashed

©2021 Bloomberg L.P.


More Related News

Junket King
Junket King's Arrest Spurs Selloff as Key Macau Market Targeted

(Bloomberg) -- The tide turned swiftly on Friday in Suncity Group's VIP rooms across casinos in Macau, where millions of dollars are bet on blackjack and...

Huobi Group Picks Singapore as Regional Headquarters
Huobi Group Picks Singapore as Regional Headquarters

The crypto exchange has already moved significant parts of its operations to Singapore.

SoftBank-Backed Snapdeal Targets $250 Million IPO in 2022
SoftBank-Backed Snapdeal Targets $250 Million IPO in 2022

(Bloomberg) -- Snapdeal, the Indian online retailer backed by SoftBank Group Corp. and Alibaba Group Holding Ltd., plans to file preliminary documents for an...

Indonesia's Central Bank Wants to 'Fight' Crypto With CBDC: Report

Indonesia is considering developing a central bank digital currency as one way to counter the use of cryptocurrency in the country.

Omicron Reaches Nations From U.K. to Japan in Widening Spread
Omicron Reaches Nations From U.K. to Japan in Widening Spread

(Bloomberg) -- The omicron variant of Covid-19, first identified in South Africa, has been detected in locations from U.K. to Spain and Canada, showing the...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


  • zee raja
    (2021-11-26 07:40:17Z)

    (Bloomberg) -- Trading giant Vitol Group agreed to buy Vivo Energy in a deal valuing the Africa-focused fuel retailer at about $2.3 billion.


Top News: Business