TOTAL buys Caltex
COMPANY officials do not expect an immediate change in pump prices in the local service stations, although the acquisition of Caltex by TOTAL Uganda will create larger economies of scale.
By David Mugabe
COMPANY officials do not expect an immediate change in pump prices in the local service stations, although the acquisition of Caltex by TOTAL Uganda will create larger economies of scale.
“We will be in position to enjoy economies of scale, yes, but we cannot say the price will drop tomorrow because this is linked to international prices. I would be lying if I said that prices are going to change immediately,†said Mamadou Ngom, the TOTAL Uganda managing director.
Acquisitions, takeovers and mergers usually allow companies to pool human and capital resources together which reduce operation costs in the long-run and lead to business efficiencies.
This is then passed onto the final consumer in the way of lower prices and greater convenience.
With the takeover, TOTAL Uganda becomes the second largest oil firm, commanding a 20% market share after Shell Uganda. But there is a sh30 difference between the two companies’ pump prices.
The deal which gives TOTAL control over Chevron was completed after procedural regulatory approvals. A similar deal was struck in Kenya after Chevron decided to phase out its activities in the region.
TOTAL Uganda will now control 140 stations, the largest station network in the country. “The new entity (TOTAL Uganda Ltd) will employ more than 2,000 people directly and indirectly,†said Ngom.
Larroque Guillaume, the deputy director, North and East Africa, mentioned at a breakfast in Kampala last week that TOTAL’s expansive takeover of Caltex was motivated by the potential of growth and opportunity in Uganda.
Officials were, however, cagey about the cost of the deal estimated to be in millions of dollars.
COMPANY officials do not expect an immediate change in pump prices in the local service stations, although the acquisition of Caltex by TOTAL Uganda will create larger economies of scale.
“We will be in position to enjoy economies of scale, yes, but we cannot say the price will drop tomorrow because this is linked to international prices. I would be lying if I said that prices are going to change immediately,†said Mamadou Ngom, the TOTAL Uganda managing director.
Acquisitions, takeovers and mergers usually allow companies to pool human and capital resources together which reduce operation costs in the long-run and lead to business efficiencies.
This is then passed onto the final consumer in the way of lower prices and greater convenience.
With the takeover, TOTAL Uganda becomes the second largest oil firm, commanding a 20% market share after Shell Uganda. But there is a sh30 difference between the two companies’ pump prices.
The deal which gives TOTAL control over Chevron was completed after procedural regulatory approvals. A similar deal was struck in Kenya after Chevron decided to phase out its activities in the region.
TOTAL Uganda will now control 140 stations, the largest station network in the country. “The new entity (TOTAL Uganda Ltd) will employ more than 2,000 people directly and indirectly,†said Ngom.
Larroque Guillaume, the deputy director, North and East Africa, mentioned at a breakfast in Kampala last week that TOTAL’s expansive takeover of Caltex was motivated by the potential of growth and opportunity in Uganda.
Officials were, however, cagey about the cost of the deal estimated to be in millions of dollars.