Chevron-Sinopec $900mn merger deal gets South Africa green light

The Competition Tribunal of South Africa has approved with conditions the $900 million acquisition of Chevron South Africa (CSA) by SOIHL Hong Kong Holding Limited (SOIHL HK). SOIHL HK is a subsidiary of the state-owned China Petroleum & Chemical Corporation or Sinopec.

The acquisition gives China’s SOIHL HK a 75% share in Chevron’s South African unit, which owns assets including a 100,000 barrel per day oil refinery, a lubricants plant in Durban, 820 petrol stations, oil storage facilities, and 220 convenience stores in South Africa and Botswana.

As one of the conditions of the transaction, SOIHL HK is subject to investing 6 billion rand ($504 million) to upgrade CSA’s refinery within five years.

In addition, CSA shall not retrench any employees as a result of the merger, said the South African Competition Tribunal in a statement.

With regard to service station operations, SOIHL HK shall ensure a ratio of independently owned CSA service stations of at least 65% and shall give preference to South African small businesses, especially black-owned businesses.

Currently, there are only approximately 25% owned by CSA while the rest, 615 stations, are independently owned.