Shell divests downstream business in Africa to Vitol, Helios for $1B

Source: Royal Dutch Shell

Shell (NYSE: RDS.A) (NYSE: RDS.B) has agreed to divest the majority of its shareholding in most of its downstream businesses in Africa to Vitol and Helios Investment Partners for a total consideration of some $1 billion. Under the agreements, Shell will retain equity in two new joint venture companies, which will assure continued availability of Shell fuels and lubricants in 14 African countries under the Shell brand. 

One joint venture will own and operate Shell's existing oil products, distribution and retailing businesses in 14 African countries, with the potential to add five more in future. Vitol and Helios will hold 80% of the venture and Shell will hold the remaining 20%. A separate company, which will be 50% owned by Shell and 50% by Vitol and Helios, will own and operate Shell's existing lubricants blending plants in seven countries and will manage macro-distributor relationships in each of the countries where the main venture operates, plus a number of others. 

Shell, Vitol and Helios will now concentrate on securing necessary regulatory approvals and integration planning, ahead of a phased completion of the proposed deal during 2011 and the first half of 2012. 

The deal covers existing Shell downstream businesses (Retail, Commercial Fuels, Liquefied Petroleum Gas, Lubricants, Bitumen, Aviation and Marine) in Morocco, Tunisia, Egypt (excluding lubricants), Cote d'Ivoire, Burkina Faso, Ghana, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Madagascar and Mauritius. Shell's downstream businesses in Namibia, Botswana, Togo, Tanzania and La Reunion are under review for potential inclusion in the deal at a later date. 

Shell's fuels, lubricants and refining activities in South Africa, the company's lubricants business in Egypt and its exploration and production businesses, liquefied natural gas interests and most international trading activities in Africa are not part the proposed deal.



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