Glencore To Acquire 75% Stake In Chevron SA And 100% Stake In Chevron Botswana From Off The Shelf Investments For US$973 Million

Published: Oct 06 2017
Deal Summary

Glencore plc, a diversified natural resource company, entered into an agreement to acquire a 75% stake in Chevron South Africa (Pty) Limited, a company engaged in refining and marketing of petroleum products in South Africa, and 100% stake in Chevron Botswana Proprietary Ltd., a fuel retailing company, from Off The Shelf Investments Fifty Six (RF) Proprietary Limited (OTS), a group that was encouraged to buy up assets under South Africa’s economic empowerment rules, for a cash consideration of US$973 million. Glencore will pay the consideration from its cash resources.

The assets include Cape Town refinery, which has a refining capacity of 110,000 barrels per day; lubricants manufacturing plant in Durban; a network of more than 820 Caltex branded service stations (with 220 convenience stores) across South Africa and Botswana; and storage tanks and oil depot distribution facilities.

Early in 2017, OTS exercised its pre-emptive right to acquire 75% stake in Chevron South Africa and 100% stake in Chevron Botswana from Chevron Global Energy Inc.

Currently, Chevron Global owns 75% stake in Chevron South Africa and 100% stake in Chevron Botswana, while OTS owns 25% stake in Chevron South Africa. Following the completion of the above transactions, Glencore will own 75% stake in Chevron SA and 100% stake in Chevron Botswana, while OTS will own the remaining 25% interest in Chevron SA.

The transaction will enable Glencore to strengthen its downstream business operations.

The transaction is expected to be completed in mid-2018, subject to the receipt of all necessary regulatory approvals by OTS and Glencore.

Glencore said in a statement, “Glencore believes that the assets provide an attractive downstream opportunity for its oil business. Glencore intends to manage its overall oil asset portfolio to ensure that, including this transaction, net additional capital investment is limited to less than US$500m over the next 12 months.”

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