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Three of South Africa’s largest filling station brands, Shell, Caltex and Engen, have exchanged hands in the past decade in multibillion-rand deals that injected confidence in a market where fuel sales were dwindling due to the reduction in commuting brought on by the Covid work-from-home trend.
One company, Rothschild, was the adviser in all three deals, a sign of how it is strengthening its advisory business in South Africa — a market in which it has struck R720bn worth of deals in the past five years alone.
The firm advised on all of the downstream disposals in the Southern African market by the oil majors — the $1bn (R16.5bn) disposal by Chevron of its downstream and retail assets in South Africa and Botswana to Glencore, the disposal of Petronas’s 74% interest in Engen, and the recently announced $1bn disposal of Shell’s downstream and retail business in South Africa to the UAE outfit Adnoc.
The firm has not only been at the centre of the evolution of the downstream fuel industry but has also had a hand in many big deals that have reshaped corporate South Africa and unlocked value for shareholders.
And there has been a lot of business to compete for in South Africa over the past decade — consequential big-ticket items, mergers & acquisitions and corporate restructurings aplenty.
Chief among these was the mammoth managed separation of Old Mutual in 2018, which Rothschild was central in bringing to fruition. The £9.1bn (R200bn at current rates) transaction saw the 170-year-old group separate into four independent businesses and included the subsequent £2.8bn listing of Quilter on the LSE and JSE and further disposals in a number of jurisdictions.
Old Mutual entrusted Rothschild to hold its hand through the complex deal.
Our unique insights and deep understanding of the broader stakeholder environment allow us to assist clients navigate an increasingly complex regulatory regime.
— Paul Bondi, Rothschild & Co
Rothschild’s South African operation, headed by Martin Kingston, offers an array of services, including M&A, debt advisory and restructuring, and equity market solutions. The firm has also carved out expertise in providing advice on broad-based BEE transactions.
Paul Bondi, MD and co-head at Rothschild’s South Africa office, told Business Times that the firm’s advice goes beyond the financial rigour required in assessing, designing and executing transactions and includes guiding clients through the complex regulatory and stakeholder environment.
“Our unique insights and deep understanding of the broader stakeholder environment allow us to assist clients navigate an increasingly complex regulatory regime where transactions require the support and approval of a multitude of stakeholders, including market regulators, labour and government authorities,” Bondi said.
“Success depends as much on relationships, trust and insights as it does on financial advice.
“We combine our local insights with the global reach of our network across 61 locations in 48 countries, and more than 200 years of advisory heritage, in delivering successful outcomes for our clients’ most important transactions. Our independent advisory model, where our clients’ interests are paramount, allows us to avoid many of the conflicts faced by balance-sheet banks.”
Two recent deals the company advised on, Coca-Cola Hellenic Bottling’s (HBC) $2.6bn purchase of Coca-Cola Beverages Africa (CCBA) and Harith’s acquisition of FlySafairfor an undisclosed amount, were this week approved by the Competition Commission with conditions.
The London-listed HBC will seek a secondary listing on the JSE following the conclusion of the deal, which is expected later this year.
This is not the only Coca-Cola related deal Rothschild has been involved in. The firm has advised the Coca-Cola Co and the Coca-Cola system on all their major transactions in the region, including the formation of CCBA in 2016 and the subsequent BEE transaction.
In February, Harith and FlySafair — which controls about 67% of the local market — announced one of the most consequential private equity transactions in recent a
“South Africa remains an important market in our global network and a hub for our wider African activities. Combining deep local relationships and on-the-ground expertise with the reach of our international platform, we help clients navigate complexity, access global capital and pursue opportunities across Africa and beyond,” Bondi said
“We have built a longstanding track record advising clients on some of the country’s most significant corporate and sovereign transactions, remaining a trusted adviser through decades of economic and political change.”
