- Tsaone Segaetsho
TotalEnergies will finally be closing off its business interests in Botswana to focus on larger segments of its business. This comes after the company received regulatory approval this week to complete its much anticipated divesture from the Botswana shores.
This week Competition and Consumer Authority(CCA) dealt with conclusion of Merger Notice number 7 of 2024 where a decision was made for the proposed acquisition of the entire issued ordinary share capital of TotalEnergies Marketing Botswana by Prax South Africa.
It was notified to CCA that Prax SA, is controlled by Prax South Africa Holdings (Pty) Ltd and both companies are incorporated in accordance with the Laws of South Africa. In deeper autonomy, CCA was told that Prax Holdings is controlled by Prax Overseas Holdings Ltd, a subsidiary of State Oil Limited. State Oil and Prax Group Holdings are domiciled in the United Kingdom.
“The aforementioned companies are collectively referred to as the “Acquiring Group”. The Acquiring Group is an upstream, midstream and downstream energy group engaged in the production, supply, storage, refining and distribution of (i) crude oil, (ii) petroleum products and (ii) biofuels,” said CCA.
When making a decision recently CCA CEO Tebelelo Pule said Prax is an offshore enterprise with no direct or indirect presence in Botswana. She further ruled that TotalEnergies Botswana is active in Botswana through marketing and supply of petroleum products such as diesel and petrol and lubricants to both individual and company customers.
“Based on the description of the product offering of the target entity. It is worth noting that the majority of petroleum products marketed and sold in Botswana are imported from South Africa. From the previously assessed transaction between VIP II Blue B.V. and Vivo Energy plc., the supply chain activities for petroleum business include both upstream activities (such as the trading of refined petroleum products) and downstream activities (retail and commercial distribution of petroleum products) solely in Africa. It can be concluded that the target enterprise operates in the downstream market for marketing and distributing petroleum products in Botswana,” said Pule recently.
When putting judgement to her decision, Pule maintained that from her conclusion, there is absence of product overlap in the activities of the merging parties in Botswana.
“In addition, the proposed transaction will not give rise to market share accretion in the relevant market post implementation. Therefore, status quo is expected to be maintained post-merger. Furthermore, there is effective remaining competition post- merger in that the relevant market is highly competitive, and the merged party will face competition from a number of entities,” she added.
Pule said the Authority has established that the Proposed Transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the downstream market for marketing and distributing petroleum products in Botswana. She said furthermore, the proposed merger will not have any negative effect on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act, 2018.
Last year, TotalEnergies Marketing South Africa has been in a rampant business strategy to divest non-core assets like its Botswana subsidiary which is in the marketing and supply of petroleum products such as diesel and petrol and lubricants to both individual and company customers.
In an announcement made in December last year, TotalEnergies South Africa said it planned to get rid of its “non-core assets” and focus on its large integrated fuels & petrochemicals platforms and this was made official by Total Energies CEO, Jean-Pierre Sbraire.
This decision led to the South African petroleum company selling its fringe assets to Prax South Africa which is owned by Prax Group from United Kingdom. This means the 20 service stations in Botswana will be branded with the colors of Prax South Africa.
While not wanting to go official, TotalEnergies Botswana directors hinted that all their colors will change to Prax whose origins is from United Kingdom. The Directors of TotalEnergies Botswana are not Batswana; Bucelani Onward Tubela (South African), Lesley Green (British) and Mariam Aissata Kane-Garcia (French).
Prax SA in Botswana is targeting to bolster its midstream division in South Africa by taking over TotalEnergies South Africa and its downstream business by engulfing Botswana business. Prax midstream division includes refining, blending, storage and transportation of petroleum products and biofuels while downstream includes marketing fuels and products to their customers encompassing our retail, industrial and commercial aviation, and marine business lines.
