The Tribunal will hear the matter tomorrow, Wednesday 13 March 2019, whereby Glencore South Africa Oil Investment (Pty) Ltd (Glencore SA) seeks to acquire Chevron South Africa (Pty) Ltd (CSA).
 
The parties:
 
Glencore SA is a wholly-owned subsidiary of Glencore SA Oil Investment (Pty) Ltd (Glencore SA Oil Holdings), which is ultimately controlled by Glencore plc (Glencore), a public company with shares listed on the London and Johannesburg Stock Exchanges.
 
CSA is controlled by Off The Shelf Investments 56 (RF) (Pty) Ltd (OTS), a Broad-Based Black Economic Empowerment Consortium. CSA controls Coal Resources (Pty) Ltd (Coal Resources), a dormant company that does not trade.
 
Their activities:
 
Glencore’s business includes an energy products business segment relating to oil mining and oil production activities. This involves trading in crude oil, refined oil and natural gas. Glencore’s activities in South Africa include supplying crude oil, petrol and diesel to local customers and purchasing petroleum products from refineries for export only.
 
CSA is a refiner and supplier of petroleum products in SA. It operates a crude oil refinery in Cape Town where it refines crude oil to produce petroleum products for sale locally, including to retail and non-retail sectors. Further, CSA has a lubricant manufacturing plant in Durban. It markets its products in SA under the Caltex brand through a retail network of company owned, company leased and independent franchised service stations nationwide.
 
Background to this transaction:
 
This transaction has taken two previous steps, namely:
The Sinopec Transaction; and
The OTS Transaction.
OTS had a pre-emptive right to acquire CSA. OTS only exercised this right after a third party, Sinopec, had bid for CSA and the transaction had been approved. In terms of the pre-emptive right, Chevron Global was obliged to extend an offer to OTS to purchase CSA on the same terms and conditions agreed with Sinopec. The OTS merger was approved in September 2018.
 
Glencore was appointed as OTS’s technical and financial advisor in the OTS transaction. It intended that (independent from that transaction) it would purchase CSA from OTS, resulting in this transaction between OTS and Glencore.
 
Conditions:
 
The Commission has recommended to the Tribunal that the large merger be approved with conditions, including conditions that address possible concerns relating to BEE shareholding in CSA; concerns relating to CSA retirees; and concerns relating to Glencore honoring CSA’s existing contracts with, and obligations to, Branded Marketers. In addition, further conditions to the proposed merger relate to a moratorium on merger-related retrenchments; the upgrading and expanding of refinery capacity in SA; and the use of all reasonable efforts to increase indirect employment through the establishment of the Development Fund.
 
The Tribunal will consider this matter tomorrow (Wednesday) and issue its decision thereafter.
 
Time: Tribunal hearings start at 10am. Place: Tribunal court room, Ground Floor, Mulayo Building, Block C, Dti Campus, 77 Meintjies Street, Sunnyside, Pretoria.