Nigerian fuel distributor NIPCO Plc has bought another 3.23 percent stake in 11 Plc, the fuel retailer formerly known as Mobil Oil Nigeria, for 4.84 billion naira ($16 million) to increase its holding to 70 percent.
Nipco’s investment subsidiary in October bought 60 percent of Mobil Oil Nigeria from Exxon Mobil Corp., when the U.S. giant pulled out of downstream fuel distribution in Nigeria.
Having amassed a stake of almost 67 percent, it wanted to increase that holding to around 70 percent. Under Nigerian takeover rules, it had to offer the same price of 417.12 naira per share to minority investors.
The downstream oil industry in Africa’s biggest economy is consolidating as multinational oil firms sell out to focus on higher margin exploration and production following a drop in crude prices.
Nigeria exports nearly 2 million barrels of oil a day but imports the bulk of its refined products because its refining capacity is unable to meet the country’s daily fuel needs of 40 million litres.
Mobil Oil Nigeria was founded in 1951 and operates more than 200 petrol stations in the country. It also owns three plants that manufacture lubricants, petroleum jelly, and insecticides in Nigeria’s commercial capital of Lagos.
Following the approval of the Securities and Exchange Commission (SEC) and The Nigerian Stock Exchange (NSE), NIPCO Investments Limited (NIPCO), a wholly owned subsidiary of NIPCO Plc, in a trade executed on the floor of the Nigerian Stock Exchange on Friday 31st March 2017, completed the acquisition of ExxonMobil Oil Corporation’s stake in Mobil Oil Nigeria Plc in a deal worth N90 Billion and one of the biggest in the downstream sector in recent years.
CORDROS Securities Limited acted as the Execution Stockbroker to both ExxonMobil Oil Corporation and NIPCO Investments Limited for this transaction.
NIPCO’s acquisition of the majority stake in Mobil will serve as a significant breakthrough, which could bolster investors’ confidence and appetite in the sector, following the deregulation initiative of the Federal Government of Nigeria in the downstream oil and gas industry.
Also, this strategic move by NIPCO will ensure the continuous growth and expansion of its Nigerian retail footprint, increase efficiency gains (economies of scale) whilst adding tremendous value to the downstream sector as a result of this notable transaction.
NIPCO is required, by The Investment and Securities Act, to make a takeover bid to all minority shareholders of Mobil Oil Nigeria Plc, having acquired 60% of Mobil shares.
