Glencore closes in on $1 billion deal for Chevron’s Southern African assets

Glencore is set to beat China Petroleum & Chemical Corp (Sinopec) to the signature of Chevron’s Southern African assets after reports emerged from three sources close to the matter.

The Swiss-based miner appears to have trumped Sinopec’s US$900 million valuation of the assets after allegedly coming in with a bid close to a $1 billion. It will complete the deal within the next six weeks, according to one of the individuals.

Sinopec had an agreement in place with Chevron for its 75% holding in the Southern African assets at the start of the year, however the deal stalled after black-owned minority partners (backed by Glencore) exercised a pre-emptive right on the stake.

Recent political changes in South Africa may have also worked against Sinopec according to the sources, with new president Cyril Ramaphosa’s seemingly favouring Glencore as the preferred buyer.

Chevron’s assets in Southern Africa include a 100,000 barrel a day refinery in Cape Town, a lubricants plant in Durban and more than 800 gas stations in South Africa and neighbouring Botswana.