Ardova Plc. just announced it’s 100% acquisition of Enyo Retail and Supply Limited. While regulatory approval is pending, reports indicate that the deal is more or less done. This will make Ardova the largest downstream energy company in Nigeria. Reading through the news, it brings to mind some basics about deals, acquisitions and business in general:
1. Deals require multiple advisers. Both Ardova and Enyo had separate financial and legal advisers for this transaction – probably among several professionals that made this deal happen. While smaller businesses might not be able to afford Banwo & Ighodalo as legal advisers, its always good to get qualified professionals to advise us on business deals
2. Deals take time. When this one started initially at the beginning of the year, the plan was to wrap it up before the end of March 2021. Now, the projection is that it would conclude before the end of the 3rd quarter of the year. It’s important not too lose focus if things seem protracted
3. Companies grow through acquisitions and deals. AP itself has gone through major changes over the years since 1964: starting as British Petroleum, to African Petroleum, to Forte Oil and now Ardova. Through this acquisition, Ardova will have an additional 95 service stations, to its existing 450 stations.
Congrats to the Ardova team and all those who made this happen
I think this move is more of a ‘pre-emptive strike’ against Dangote’s perceived direct interest in the downstream sector, once the refinery goes live. By cornering the fuel station market now, Ardova leaves Dangote struggling at the beginning to gain a foothold in that sector, if eventually Dangote shows interest. I hope it pays off.