CCA conditionally approves Engen Botswana takeover
Pauline Dikuelo | Wednesday September 16, 2026 06:00
The authority said its conditions are intended to safeguard employment, protect independent dealer and franchise arrangements, and promote citizen economic empowerment.
As part of the conditions attached to the approval, Ajantha, which holds a 75% shareholding in Reddy Group, is required to divest its entire interest in the group before the transaction can be implemented. Ottapathu has an interest in Ajantha, which in turn has an interest in 67 retail station sites through its 75% stake in Reddy Group.
The CCA said the 75% stake must be disposed of to Botswana citizens or citizen-owned companies, including first-time investors.
“For a period of three years from the implementation date, Ajantha should not, either as a principal, agent, partner, representative, shareholder, director, consultant, advisor, financier, or in any other like or similar capacity, directly or indirectly be associated with, interested in or engaged in any firm, business, company with the Reddy Group,” the authority said
The conditions also seek to protect independent dealers operating under Engen dealer or franchise agreements. From the effective date of the transaction, the merged entity will be required to honour existing agreements with independent dealers, including provisions relating to fuel supply, pricing, payment, equipment, maintenance and other operational arrangements.
The CCA said any renewal of dealer agreements expiring after the transaction must, subject to ordinary business practices and mutual agreement, be negotiated on arm’s-length commercial terms that are no less favourable to dealers than those applicable immediately before expiry.
The merged entity will also be required to maintain existing supply and payment terms applicable to independent dealers and consult affected dealers before implementing material changes.
Such changes include alterations to pricing formulas, rebate structures, credit terms, supply volumes or supply priority that would make the terms less favourable to independent dealers as a result of the transaction.
The Authority has further required the merged entity to honour existing operational arrangements with independent dealers.
For three years following the transaction, they must report annually to the CCA any instances of dealer agreement non-renewal, material changes or termination, together with the reasons for such decisions. The conditions also extend to convenience store operators at Engen-branded service stations.
The merged entity must provide all convenience store operators with equal and non-discriminatory opportunities to operate at Engen-branded retail service stations, based on objective and consistently applied commercial, operational, safety, compliance, and capacity criteria.
It will also be prohibited from favouring a particular convenience store brand and must provide operators with equal opportunities to negotiate the renewal of their arrangements on commercially acceptable terms.
In a move aimed at increasing citizen participation in the fuel distribution sector, the merging parties must, within 12 months of the CCA’s decision, conduct an open, transparent, and competitive expression-of-interest process. The process must identify and appoint at least five suitable and qualified citizen-owned companies or transporters with which distributorship agreements will be concluded.
The appointments will remain subject to qualification requirements, safety standards, compliance due diligence, existing contractual arrangements, and the commercial capacity of the merged entity to sustain the appointments.
The merging parties must provide the CCA with an update on progress at least six months before the expiry of the 12-month compliance period.
If they are unable to conclude the distributorship agreements within the stipulated period, they must apply for an extension at least 60 days before the deadline and provide evidence of efforts made to comply with the condition.
Employment protection is another key condition of the approval. The merged entity will be prohibited from implementing direct merger-specific retrenchments or redundancies of citizen employees for three years from the approval date.
The CCA clarified that this restriction does not cover voluntary retrenchments or separation arrangements, voluntary early retirement packages, unreasonable refusals to be redeployed, or resignations and retirements occurring in the ordinary course of business.
Currently, the combined market share of the merging parties post-merger will be 16.1%, which is below the 25% merger dominance threshold. However, Engen Botswana is owned 70% by Petroleum Investment, and both are ultimately controlled by the Vitol Group. In Botswana, the Vitol Group controls Vivo Energy Botswana.
Engen and Vitol together in Botswana operate 163 dealer-operated retail service stations out of the 356 nationwide, representing a combined market share of 45.79%.
'This combined share is substantially above the 25% dominance threshold,' said CCA. “However, the assessment indicates the presence of relatively larger players in the relevant market, which would continue to impose competitive pressure on the merged entity.”