China’s Sinopec Corp got a major boost in its pursuit of Chevron’s South Africa and Botswana assets after South Africa’s Competition Tribunal approved, with conditions, the $900 million transaction on Friday.
State-owned Sinopec was competing for the assets against commodities trader and miner Glencore, which swooped in last October with a $973 million bid following delays to Sinopec’s original agreement.
The transaction is subject to Sinopec investing 6 billion rand ($504 million) over five years to develop a refinery in South Africa’s Western Cape, over and above Chevron’s current investment plans, the Tribunal said in a statement.
The Tribunal also said there should be no retrenchments as a result of the proposed transaction.
As part of the deal, Sinopec will buy a 75 percent share in Chevron’s South African subsidiary that runs the 100,000 barrel per day refinery, a lubricants plant in Durban and 820 petrol stations and other oil storage facilities.
The deal also includes 220 convenience stores across South Africa and Botswana.
($1 = 11.9091 rand)
Reporting by Nqobile Dludla; Editing by Joe Brock