The Competition and Fair Trading Commission (CFTC) says it is yet to receive an application for Mount Meru Group’s acquisition of Vivo Energy to provide relevant regulatory approvals.
CFTC spokesperson Innocent Helema said this in an interview after the two companies announced a sale and purchase agreement for Mount Meru’s acquisition of Vivo Energy’s shareholding in Vivo Energy Rwanda and Vivo Energy Malawi, which trades as Engen.
He said: “However, the commission noted that in the recent public announcement of the sale and purchase greement, the transaction remains subject to statutory regulatory approvals and fulfillment of conditions precedent.
“The commission has not made any assessment yet. Since the commission has not yet made any assessment, no monitoring mechanisms have been put in place.”
The transaction, whose financial details were not disclosed, covers Vivo Energy’s network of more than 40 service stations in Rwanda and over 50 in Malawi, along with its commercial fuel and lubricants operations.
Mount Meru Group director Atul Mittal is quoted in the statement as having said the business, which entered Rwanda in 2007 and Malawi in 2013, adds to the company’s established regional presence and track record in downstream fuel distribution across Africa.
“We are proud to be growing our existing, long-standing presence in Rwanda and Malawi,” he said.
Vivo Energy chief executive officer Stan Mittelman, on the other hand, described Mount Meru as a partner well-placed to bring focused investment, local and regional expertise and long-term ambition to the businesses in Rwanda and Malawi.
The two companies said the transaction remains subject to approval from relevant authorities and fulfillment of conditions precedent, with completion expected to take several months.
Both Mount Meru country manager for Malawi Ketan Kotecha and Malawi Energy Regulatory Authority spokesperson Fitina Khonje were yet to respond to our questionnaire by press time.
Petroleum Importers Limited and oil marketing companies also declined to comment on whether the deal could affect competition.
But Consumers Association of Malawi executive director John Kapito said the acquisition will not affect competition or fair trade in the country as the two firms are among the smallest players in fuel distribution.
He said: “These two oil importers are the smallest players in the distribution of fuel on the market and their takeover arrangements have no impact on supply.
“All oil importers are regulated by Mera and their takeover arrangements have no effect on the market.”
Vivo Energy operates in Malawi under the Engen brand, with a chain of at least 50 service stations.
