SOUTH AFRICA – The Competition Commission of South Africa has recommended that the Competition Tribunal conditionally approve Glencore’s proposed acquisition of the Chevron SA assets.
However, the commission highlighted that the proposed transaction had raised public-interest concerns and hence has recommended its approval subject to a number of conditions, Business Daily reports.
As part of the conditions, the commission recommends that there be no retrenchments of Chevron SA workforce as a result of the merger.
Additionally, Glencore, a global resources company, should also ensure that Chevron SA’s head office remains in the country and that the business is operated substantially on a stand-alone basis.
According to the watchdog, the deal will also ensure that Chevron’s decisions be taken in SA and, where practical, be implemented using local skills and expertise.
Glencore is also expected to ensure that ongoing contractual obligations toward retired employees of Chevron SA are met.
According to Glencore’s chief executive officer, Ivan Glasenberg, Glencore expects to finalise its acquisition of Chevron SA’s assets by the end of June 2019.
“We are going through the process there and expect it to be concluded in the first half of the year,” Glasenberg said.
Henceforth, Glencore has undertaken to ensure that existing contracts with independent fuel distributors, the Caltex branded marketers, are not changed to be less favourable to them.
As global natural resources company that has business operations centred in crude oil and refined oil products, Glencore has been angling for the Chevron SA assets since 2017, with sources indicating that the firm has actually already paid for them.
The assets include a 110,000 barrel-a-day refinery, a lubricants plant, 820 petrol stations and oil storage facilities and, in March 2017 despite earlier indication that a Hong Kong-based oil company, Sinopec, would acquire them.
However, Glencore then bankrolled Chevron SA’s empowerment partner and minority shareholder — Off The Shelf — to exercise its right of first refusal of the deal.
Supported with a US$1bn loan from Glencore, Off The Shelf went on to acquire Chevron SA.
If Glencore’s acquisition receives the approval it needs from the competition tribunal, Off The Shelf will then transfer a 75% stake of Chevron SA to Glencore, and retain its original 25% empowerment shareholding.