CTC approves BP, Shell assets takeover

By Martin Kadzere
THE Competition and Tariff Commission has approved the takeover of BP and Shell Zimbabwe assets by Harare businessman Mr Shingi Mutasa’s FMI Zimbabwe.
This puts to rest uncertainty surrounding the fate of those assets as indigenisation lobby groups were trying to block the transaction.
The deal between FMI, the majority shareholder in AIM-listed Masawara, BP and Shell Zimbabwe, encompasses the latter’s entire local assets.
The assets include 73 fuel retail sites and storage facilities with a holding capacity of approximately 59,5 million litres of petroleum products across 10 centres.
Last week, CTC said: “Please be advised that the examination of the transaction involving the acquisition of the entire issued share capital in Shell and BP has been finalised and the commission has approved the acquisition.”
Last year, FMI said it was committed to a broad-based empowerment initiative in the business that is expected to include a share trust for management and staff as well as a dealer ownership scheme for a significant number of sites.
Earlier, the National Indigenisation and Economic Empowerment Board blocked the acquisition of BP and Shell Zimbabwe by two foreign-owned oil companies, saying the move was not consistent with the country’s indigenisation laws.
Mauritius-based Engen Holdings International and KenolKobil were keen to buy BP and Shell Zimbabwe. But that attracted strong opposition from black empowerment lobby groups which felt that this violated indigenisation and empowerment laws.
Disposal of a foreign firm, according to the Economic Empowerment Regulations which came into effect at the beginning of this month, should result in 51 percent local ownership.
NIEEB cited the third schedule of the general regulations, which states that retailing and distribution of fuel should be reserved for indigenous players, unless there is a minister’s exemption.
NIEEB chairman Mr David Chapfika thus recommended that a consortium of indigenous merchants be considered. Prior to the decision by the NIEEB, BP and Shell workers had shown willingness to buy the two businesses as a going concern.
“It is also our considered opinion that all sitting indigenous fuel tenants be protected and be accorded the right of first refusal under the considered arrangement,” said Mr Chapfika. “The deal should give room for new entrants should the need arise.”
It is also understood Government, through the Ministry of Youth Development, Indigenisation and Empowerment, had encouraged Engen and KenolKobil to engage local partners to ensure they comply with the empowerment laws.
BP and Shell’s joint Zimbabwe operations employ about 400 workers. Its Harare blending plant has a capacity of 30 million litres a year.
Engen is one of South Africa’s leading petroleum product retailers and KenolKobil is an oil retailer in Kenya.