Sasol and Malaysian petrochemical group Petronas, which owns 80 per cent of Engen, have agreed in principle to a "merger of equals" that would create South Africa's leading liquid fuels business.

Sasol and Malaysian petrochemical group Petronas, which owns 80 per cent of Engen, have agreed in principle to a "merger of equals" that would create South Africa's leading liquid fuels business.

The combination of Engen and Sasol and their interests in the retail, commercial and wholesale markets would create a leading fuels business with a presence in all provinces. Engen possesses a sturdy 28 percent share of the retail market while Sasol's refining operations supply 40 per cent of the local market, primarily in Gauteng. Combined, they would have a network which includes over 1 250 Engen service stations, as well as Sasol, Exel and Zenex service stations. Many of these service stations have Quickshop or Sasol Delight convenience shops attached to them.

As a joint venture, they would have operations in 14 countries including the entire sub-Saharan Africa.

The merger would be effected by way of a joint venture with the partners having a 37,5 per cent interest and the Black Economic Empowerment (BEE) partners holding a combined 25 per cent, reported.

Pieter Cox, deputy chairman and chief executive of Sasol, said : "Together with Petronas and our respective BEE partners we look forward to the joint venture's development and success."

Tan Sri Dato' Mohd Hassan Marican, the president and chief executive officer of Petronas, said: "The merger of Engen and Sasol's Liquid Fuels Business is an exciting development in the next stage of our investment in Southern Africa. Together , these two businesses will have an enhanced platform on which to build and expand."

The partners plan to reach definitive agreements concerning the merger during the third quarter of this year and a further announcement will be made at the conclusion of the process.

Definitive agreements will be subject to regulatory review which it is hoped will be completed during the last quarter of this year.

Original article from Car