Vitol to acquire Vivo in $2.3bn deal

February 2022 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

February 2022 Issue

Commodities trader Vitol Group has agreed to acquire Britain’s Vivo Energy in a deal valued at around $2.3bn. Under the terms of the agreement, Vivo shareholders will receive $1.79 in cash for each share they hold, and six cents as an interim plus special dividend. The deal is expected to complete in the third quarter of 2022, subject to certain closing conditions and shareholder approval.

Netherlands-based Vitol, which is already the top Vivo investor with a 36.1 percent stake in the company, will also buy out Helios, the second biggest shareholder. Vivo was founded after Shell divested some of its downstream business in 2011. Vitol, Helios and Shell operated the company as a joint venture before the two top shareholders bought out Shell for $250m in 2016. Vitol had engaged with Helios on many occasions in recent years to buy its 27.1 percent stake in Vivo.

“Since we founded Vivo with Helios and Shell, we have believed in the business’ potential and

we are excited to have it within the Vitol family, as a pillar of our strategy in Africa,” said Chris Bake, head of origination at Vitol. “We are pleased that both Helios and the Independent Vivo Directors support our proposal. We very much look forward to working with management on this next phase of growth and we thank Helios for their support and collaboration over the last ten years.”

“Since Vivo Energy was established 10 years ago, the company has had a clear growth strategy

and looked to deliver sustainable value for all its stakeholders,” said John Daly, chair of Vivo. “The Independent Vivo Directors believe that Vivo’s leading position in Africa means that it is well positioned to continue to capitalise on the opportunities that will arise from the fundamental growth drivers on the continent. Vivo also demonstrated the strength of its business model through the impacts of the pandemic, with a rapid recovery in operational and financial performance, supported by committed leadership and employees who embody the unique Vivo culture. This performance and strong financial position has enabled the business to deliver on its growth plans and allows the Independent Vivo Directors to consider its future and evaluate Vitol’s offer from a position of strength.

“The offer from Vitol represents an attractive value in cash for Vivo Shareholders, and Vitol’s proven track record of supporting Vivo’s long-term growth plans will support Vivo in continuing to deliver benefits to its wider stakeholders,” he added.

Vitol was founded in Rotterdam in 1966 and has around 6600 retail sites on four continents, according to the company’s website. Vivo has operations in 23 countries across Africa. It distributes and sells Shell and Engen-branded fuels and lubricants through its network of more than 2400 service stations.

The offer is being made by an entity indirectly owned by Vitol Investment Partnership II Limited. The VIP investment vehicle is managed by Vitol executives and has previously been used to buy assets including refineries and fuel stations in Australia. VIP II backers in the past have included funds related to George Soros’ Quantum Partners, the Abu Dhabi Investment Council and Saudi Arabia’s Olayan Group, according to its most recent corporate filings in Jersey. Vitol has committed to fund 47.5 percent of the investments made by VIP II.

Vitol’s offer follows a lower proposal of $1.55 per share in February 2021, which 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 percent stake.

Richard Summerfield