Chinese oil firm in bid for Chevron gets nod
CHINESE oil giant Sinopec has won regulatory approval for its $900-million bid for SA’s second largest oil company, Chevron SA – but it could still be trumped by a rival bid from Chevron SA’s empowerment shareholders, who are backed by Glencore.
The Competition Tribunal gave the go-ahead to the Sinopec deal on Friday, after Sinopec agreed to two additional conditions in response to complaints by Chevron SA’s branded marketers.
The 10 branded marketers, mini-oil firms that control more than two-thirds of the fuel Chevron retails in SA, had complained at tribunal hearings that they had not been adequately consulted and were concerned about their future, especially given Sinopec’s ultimate intention to rebrand Chevron SA’s 885 Caltex filling stations.
The two new conditions aim to ensure Sinopec picks up some or all of the rebranding costs of the filling stations and does not change any contracts with the branded marketers to their detriment.
These conditions add to the far-reaching public interest conditions, which Sinopec had already agreed to with Economic Development Minister Ebrahim Patel, and which have now been made conditions of the tribunal’s approval of the deal.
These include a commitment by Sinopec to invest R6-billion in upgrading Chevron’s Cape Town refinery and a further R215-million in a development fund to support small black-owned suppliers, as well as an undertaking that Sinopec sets up its regional head office in SA and maintains or increases local procurement and black-empowerment ownership.
It is understood the rival bidders would have to match all the conditions if they want to gain the approval of Patel and of the competition authorities for their deal.