Government authorities approved French oil products supplier Rubis‘ acquisition of KenolKobil, a leading lubricant company in East Africa, with the cash offer closing on Feb. 18. Rubis, which already owned 24.99 percent of KenolKobil, announced a takeover offer valued at $353 million in October.
Rubis disclosed in a press statement Jan. 10 that Kenyas Capital Market Authority approved its offer to purchase all issued shares of KenolKobil Plc for 23 Kenyan shillings (U.S. $23 cents) per share. Offer documents were posted to KenolKobil shareholders on Monday. Rubis said the deal was also approved by the Competition Authority of Kenya and the Common Market for Eastern and Southern Africa Competition Commission.
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In October Rubis noted that East Africa’s petroleum distribution segment has grown steadily due to urbanization and investments in road infrastructure. “KenolKobil is present in areas with a population of more than 200 million people, offering favorable perspectives,” Rubis stated in a news release. “KenolKobil fits perfectly within Rubis’ investment objectives and criteria and would increase ideally Rubis’ presence in Africa, in especially promising areas where the group sees a new impetus towards the future.”
Rubis said its offer price should be attractive to shareholders because it represented a 53.4 percent premium to the volume weighted average price at which shares traded over the 30 trading days preceding the takeover announcement.
KenolKobil advised shareholders to accept the offer.
David Ohana, managing director of KenolKobil, confirmed the deal to Lube Report but declined to comment further about it.
Joseph Juma, head of technical sales at IMCD Kenya, told Lube Report that the deal will not have much impact on the local lubricant market in East Africa because KenolKobil works mainly with third party toll blenders. However, he added that if Rubis invested in building its own blending plant, it would give KenolKobil some advantage on the local lubricant market.
KenolKobil claims to be East Africas leading downstream player, with about 350 retail outlets across the sub-region. The company distributes lubricants, aviation fuels, liquid propane gas and bitumen in Kenya, Burundi, Ethiopia, Uganda, Rwanda and Zambia.
Rubis has been on an acquisition spree since 2017, buying fuels and oil products supply and distribution businesses in countries such as Haiti, Madagascar, Portugal, Italy and Iran.