Sub-Saharan-focused private equity firm Helios Investment Partners has struck its largest-ever deal with the $1 billion agreement to purchase the majority of Royal Dutch Shell’s downstream oil businesses in Africa. Netherlands-headquartered energy trading company Vitol Group, which also has an oil and gas exploration and production division, is a co-investor.
The deal is in line with Shell’s prior indication it would launch a strategic review with the aim to focus on fewer, larger markets, according to a statement.
Two joint ventures are being formed around the transaction. One will own and operate existing oil products, distribution and retailing businesses in Morocco, Tunisia, Egypt, Cote d’Ivoire, Burkina Faso, Ghana, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Madagascar and Mauritius. Helios and Vitol will have equal stakes of 40 percent each in the JV, with Shell owning the remaining 20 percent.
The other company being formed will be 50 percent-owned by Shell, while Helios and Vitol will each get a 25 percent stake. That JV will own and operate existing lubricant blending plants in the same aforementioned countries, excluding Egypt, “plus a number of others”, according to the statement.
Shell’s downstream operations in five other African countries could potentially be included at a later date.
Tope Lawani, Helios managing partner, said: “We believe that combining Vitol's world class supply expertise and Helios' deep understanding of the African operating environment with the Shell brand and a highly professional workforce will create significant new growth opportunities for the business, and will ensure the continued supply of high quality products and services for African consumers.”
Subject to regulatory approvals, the deal is expected to close in the first half of 2012.
PEI reported in late 2009 that Helios was raising its second fund with a $650 million target. It was expected to invest around 50 percent of the fund’s capital in infrastructure-related projects including power, railway and telecom infrastructure.