KenolKobil Ltd, an oil marketing company based in Kenya, has acquired 33 service stations operated by Delta Petroleum in Rwanda and Uganda, the company announced on Wednesday.
Ten of these are in Rwanda.
The company said it agreed to acquire the 33 retail outlets through Delta Petroleum’s subsidiaries – Delta Petroleum Rwanda and Delta Petroleum Uganda.
“Delta Uganda is a leading oil marketing company in Uganda and has agreed to sell 23 retail outlets spread across Uganda. Delta Rwanda is also in the oil marketing business and has a network comprising of 10 retail outlets spread across Rwanda, which is the subject of the sale,” KenolKobil said in a public notice.
The company, which is publicly listed on the Nairobi Stock Exchange (NSE), did not disclose the value of the deal.
The acquisition of Delta Petroleum’s 33 service stations will bring the total retail network of the KenolKobil Group to 433 stations, of which 200 stations are in Kenya.
Kobil Rwanda’s retail outlets, on the other hand, will increase to 61 stations while Kobil Uganda will have 56 stations under its control.
The transaction is subject to legal and regulatory approvals, and the company indicated that it has been working on it since February this year, and is expected to conclude by March 2019.
The expectations are high for KenolKobil once the deal is completed.
They believe that the acquisition will contribute to the “group top and bottom lines”.
In business terms, top line is usually referred to as a company’s revenues or gross sales, while bottom line is commonly used to describe the firm’s net earnings or net profits.
“The acquisitions are in line with the Board’s growth strategy through organic and inorganic retail network expansion,” the notice reads in part.
It added that: “The acquisition also reaffirms the board’s commitment to grow the contribution of other businesses outside Kenya to the group’s bottom line”.
The deal comes at a time when news has been making rounds that KenolKobil could be acquired by Rubis Energie, a French-based firm that also deals is oil business.
Meanwhile, KenolKobil registered a net profit of Kshs1.6 billion in the first six months of this year, from Kshs1.4 billion (approximately Rwf14bn) that was registered during the same period last year.
This week, the company’s stock has been trading at Kshs18.5 (about Rwf161.9) on the Nairobi bourse.