French oil giant Total will conclude the takeover of Gulf Africa Petroleum (Gapco) East Africa assets in December, an official has said.
Jean Christian Bergeron, Total’s executive vice president for East and Central Africa and chairman Total Uganda said last week that the transaction was on course and would be concluded within two months.
“Much of the negotiations have been done, but there are a few things remaining to put it right,” he said.“By January, we will start branding Gapco stations with Total logos,” he said.
Total announced in May that it was buying Gapco assets at an undisclosed amount. However, the deal had not been completed with negotiations still ongoing. Bergeron was speaking during the launch of a new Total service station in Mukono. He said the takeover would strengthen Total’s presence in the region but also increase its market share Uganda.
“Currently we understand that Vivo Energy (Shell) is still leading in the market but we know that when the deal is done, our market share will be at 28 per cent in Uganda,” Bergeron said.
Gapco has been running 37 petrol stations in the country. Gapco’s assets in Tanzania, Kenya and Uganda include logistic terminals, several fuel stations, and 260,000 kilolitres (260m litres) of storage capacity.
In Uganda, Total now operates 125 fuel stations and with the purchase of Gapco, they will boost its stations to 162. The numbers will see the company having more stations than Vivo Energy (Shell) which has 123 fuel stations.
Shell and Total control practically 50 per cent of the entire retail market share when it comes to petrol distribution. It is anticipated that Total will be more prevailing with the acquisition of Gapco assets.
Analysts have said Total and Vivo Energy becoming more powerful is setting stage for oligopolistic tendencies, where few players control the market and could open way for cartels.
Florentin de Loppinot, managing director, Total Uganda, said they will continue to open up new eco-friendly service stations throughout the country.
“We are committed to setting up at least 10 service stations every year throughout the country,” Loppinot said.