Glencore still eyeing Chevron

Despite the Competition Commission’s recommendation that Sinopec’s bid for 75% of Chevron South Africa be approved, Glencore remains in the running for the company’s local operations, it said this week.

Glencore said in October it had entered the fray with a $973-million (R12-billion) cash offer, appearing to trump the $900-million deal on the table by SOIHL Hong Kong Holdings, owned by Chinese state-owned oil company Sinopec.

The sales process had been reopened by Chevron South Africa’s BEE partners, who own 25% of Chevron South Africa through investment vehicle Off The Shelf Investments Fifty Six (OTS), when they exercised their pre-emptive right to buy the other 75%.

On Friday Glencore spokeswoman Shamiela Letsoalo said the company’s position, as well as that of OTS, was not changed by the Competition Commission’s recommendation.

Chevron South Africa said: “Sinopec cannot yet conclude the transaction” as that deal is subject to the right of first refusal held by the minority shareholders.

An application for the approval of the Glencore and OTS deal is before competition authorities. It is not yet clear when a decision will be made, but the commission’s recommendation of Sinopec’s offer gives Glencore a taste of the public-interest conditions it may have to comply with if its transaction goes ahead.