RIL acquires East African oil marketing company
Indian Express
After entering into a memorandum of understanding (MoU) with Rohm and Haas to jointly explore the construction of a world-scale acrylic-monomer complex in Jamnagar, the Mukesh Ambani-led Reliance Industries Ltd (RIL) has now acquired majority stake and management control of Gulf Africa Petroleum Corporation (Gapco) in East Africa. RIL, however, did not disclose the acquisition size.
The purchase was made through a wholly owned subsidiary, Reliance Industries Middle East, Dmcc, a company registered in United Arab Emirates. The announcement came after market hours on Tuesday. RIL shares were marginally up on the Bombay Stock Exchange on Tuesday, to close at Rs 1,971.50.
Gapco is a multinational petroleum marketing company with operations in East Africa and a 42% share of a market estimated at $150 million. It is one of the largest independent petroleum marketing and trading organisations in East Africa, and is primarily involved in the import, supply and transport of oil products to countries in East and Central Africa.
According to a Mumbai-based analyst, the acquisition will help RIL expand its business in the region. It is a strategic step for Reliance towards achieving its global vision in the petroleum downstream sector. Further, these markets are easily accessible from India and provide an ideal fit for exports from India
Gapco owns and operates large storage and terminal facilities, and a retail distribution network in several countries, including Tanzania, Uganda and Kenya. It also operates more than 250 outlets covering the retail and industrial segments. Reliance considers its acquisition of Gapco as strategic in nature. With this acquisition, RIL expects to leverage its expertise and contribute to the petroleum downstream sector in East Africa, added the release.
Gapco was formed in 1992 to acquire the retail petroleum marketing assets of Esso in Tanzania, Uganda, Mauritius and Reunion. The company is principally owned by Yogis and Dhiran Kotak, who have a wide range of commercial interests in Tanzania and neighbouring countries.