Royal Dutch Shell has exited retail petroleum business in Kenya after selling its 20 per cent stake in Vivo Energy to Vitol Africa.
The firm, however, retains activities in the exploration front through its Shell International Exploration arm that has operations in Kenya.
Vivo Energy will continue to sell Shell products including operating Shell-branded retail outlets.
The Competition Authority of Kenya (CAK) yesterday said it had given Shell and Vitol Africa approval to conclude the transaction, which will push up Vitol’s shareholding to 60 per cent from the current 40 per cent.
“CAK has approved the proposed acquisition of 19.91 per cent of the shareholding in Vivo Energy Holdings from Shell Overseas Investments by Vitol Africa,” said CAK Director General Wang’ombe Kariuki in a public notice yesterday.
Vitol is expected to pay Sh25 billion ($250 million) for the stake.
Vivo started in 2011 as a joint venture by Vitol (40 per cent), Helios Investment Partners (40 per cent) and Shell (20 per cent) and, after its formation, acquired Shell’s shareholding in downstream petroleum business in 14 countries.
Its footprint has since grown to 16 countries.
The company had bought rights to continue using the Shell brand, which Shell said would continue even after its departure.
“As part of the transaction, a long-term brand licence agreement has been renewed with Vitol to ensure that the Shell brand will remain visible in more than 16 countries across Africa,” said Shell in an earlier statement.
“The sale is in line with Shell’s strategy to concentrate its downstream operations where it can be most competitive.”
Shell was among the leading oil marketers in Kenya before it sold its stake to Vivo Energy, which has also been able to retain a degree of leadership in the retail business.