In March 2017, SOIHL HK, which is owned by state-owned Chinese company Sinopec, had signed an agreement to acquire 75% stake in Chevron South Africa.
The deal, however, was subject to approval by the Competition Authorities of South Africa, and successful implementation of Right of First Refusal (ROFR) by the minority shareholders in CSA.
Under the terms of the deal, SOIHL will acquire assets including CSA’s Cape Town refinery, which has 100,000 barrels per day capacity, a network of approximately 850 service stations, a lubricants blending plant in Durban, storage tanks and oil depot distribution facilities.
Sinopec said that the deal would be the single largest acquisition, if implemented, by a Chinese firm for a controlling stake in a major South African company.
The South Africa’s Competition Commission has approved the deal with conditions, including certain undertakings to ensure that the transaction generates public interest benefits as well as promote the efficiency, adaptability and development of the economy.
Considering the deal would not affect potential competition in the market, the commission has also recommended the Competition Tribunal to approve the transaction but with certain conditions.
Sinopec Group spokesperson Lu Dapeng said: “Sinopec believes that South Africa’s established market, infrastructure facilities, legal environment, human resources as well as its strategic role on the continent will provide a strong platform for the implementation of Sinopec’s globalization strategy.
“Sinopec will utilize these favorable factors together with its competitive advantage in the energy industry, to achieve an optimal balance of economic growth and sustainable development for Sinopec and South Africa.”
Image: Sinopec headquarters in Beijing, China. Photo: courtesy of WhisperToMe/Wikipedia.
