Business

Glencore close to $1bn deal to buy Chevron’s southern African assets

Chevron had alread agreed to sell to Chinese company

The headquarters of Glencore International in Baar, Switzerland.

Mon May 21 2018 - 12:50

Glencore is close to a $1 billion deal to buy Chevron's southern African assets, potentially scuppering an earlier agreement with China Petroleum and Chemical , according to three people familiar with the matter.

The Switzerland-based miner and trader will complete the deal within the next six weeks, said a source.

The assets include a 100,000 barrel-a-day refinery in Cape Town and more than 800 gas stations in South Africa and neighboring Botswana. Chevron agreed last year to sell its 75 per cent holding in the southern African business to the Chinese group known as Sinopec.

However, the deal stalled after black-owned minority partners, backed by Glencore, exercised a preemptive right on the stake.

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A Chevron spokeswoman didn’t immediately reply to questions seeking comment. A Glencore spokesman declined to comment.

While Sinopec’s deal had political backing in South Africa when it was announced, the change in leadership of the ruling African National Congress and Cyril Ramaphosa’s appointment as president means Glencore is now favored as a buyer, said the people.

Despite the competition from Glencore, Sinopec has continued with a regulatory process for its own bid to buy the assets and South Africa’s Competition Tribunal in March approved a merger between the company and Chevron’s local unit.

Glencore is supporting black-investor group Off The Shelf Investments as a technical and financial partner, it said previously. Off The Shelf’s investors own the other 25 per cent of the Chevron business.

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