Picture: REUTERS
Picture: REUTERS

Global natural resources company, Glencore, has finally concluded its $1bn acquisition of the Chevron SA assets.

The finalisation of the transaction marks the end of a hard-won deal the multinational resources company doggedly pursued for more than a year.

In March, the Competition Tribunal conditionally approved Glencore’s acquisition of Chevron SA’s assets, which span SA and Botswana and include a 110,000 barrel per day (bpd) refinery, a lubricants plant, 820 petrol stations, and oil storage facilities

The conditional approval was the third the tribunal has awarded in relation to Chevron SA’s assets in the past year. In March 2018, the tribunal conditionally approved the acquisition of Chevron SA by Sinopec, a Hong Kong-based oil company. But Glencore out-foxed Sinopec when it bankrolled Off The Shelf Investments — Chevron SA’s empowerment partner — to exercise its right of first refusal of the deal.

With a $1bn loan from Glencore, and another conditional approval from the tribunal, Off The Shelf went on to acquire Chevron SA and renamed it Astron Energy. The deal was always that the BEE partners would later transfer the controlling stake to Glencore.

In a statement on Tuesday, Glencore’s wholly owned subsidiary, Glencore SA Oil Investments, announced that the deal had been closed. “Glencore is looking forward to working with the Astron management team, led by CEO Jonathan Molapo, to drive growth in the businesses as well as increasing the BEE ownership and localisation of the business in SA.” 

Off The Shelf will retain its minority shareholding of 23% in Astron, and has the option to increase this to 30% — which will help Glencore meet the tribunal’s condition that it bolster the empowerment shareholding to 35%.

In a statement, Off The Shelf, heralded the deal as a great victory for transformation and noted its intention to extend its investment in Astron Energy.

“This is the beginning of a new partnership to unlock value to all shareholders. It’s been a tremendous, team effort by Off The Shelf and Glencore. We intend to exploit this momentum and deepen the co-operation in developing and extending the energy vision for the shareholders.”

steynl@businesslive.co.za