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Glencore to buy stakes in Chevron’s South African and Botswana assets

EBR Staff Writer Published 09 October 2017

Anglo–Swiss miner Glencore has agreed to acquire Chevron’s South African and Botswana assets for $973m from local investor Off The Shelf Investments Fifty Six (RF) Proprietary (OTS).

The mining and commodities company will acquire 75% stake in Chevron South Africa Proprietary (Chevron SA) and 100% of Chevron Botswana Proprietary (Chevron Botswana).

Following the deal, the remaining 25% stake in Chevron SA will be retained by a consortium of Black Economic Empowerment shareholders and an employee trust, reports Reuters.

The assets, Glencore is buying include a 100,000 barrel-a-day crude oil refinery in Cape Town and a lubricants plant in Durban.

Glencore will also acquire 820 petrol stations, oil storage facilities and 220 convenience stores operating in South Africa and Botswana, the agency reported.

The company said that the acquisition of the assets will offer attractive downstream opportunity to its oil business.

As per the terms of the transaction, Glencore will retain the local management team and workforce of Chevron SA and Chevron Botswana.

Glencore will pay the acquisition amount in cash upon closing of the deal which will be funded through its own resources.

The mining firm said in a statement:  “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, consistent with Glencore’s conservative financial framework targets.”

In March, Chevron agreed to divest its stakes in the Cape Town refinery and also in the marketing and lubricants businesses in South Africa to China’s Sinopec for about $1bn, subject to regulatory approval. However, Glencore jumped in following delays in regulatory approvals for the deal with the Chinese company.

Glencore’s acquisition is anticipated to be closed in mid-2018 subject to receipt of all regulatory approvals by OTS and Glencore.

Last week, the company had announced to acquire a majority stake in zinc producer, Volcan for $531m, its second large deal within a week.

Image: Glencore is set to add a 100,000 barrel-a-day refinery from Chevron. Photo: courtesy of meepoohfoto/Freedigitalphotos.net.