South Africa's Competition Tribunal recently approved, with conditions, Glencore's proposed US$973 million acquisition of Chevron Corp's South African (CSA) subsidiary.

Analysts say that this probably ends the chances of China Petroleum and Chemicals Corp (Sinopec) winning through with its own bid for Chevron.

Sinopec was awarded preferred bidder status for CSA in March 2017, but subsequently global commodities trading company Glencore came in with a rival bid. In January this year Sinopec tried to strengthen its position by committing to upgrade the Cape Town based refinery which forms part of the deal.

However, though Chevron had agreed to sell its 75% stake, there was a clause in the contract that a group of local shareholders, who had acquired a 23% stake under the Black Economic Empowerment programme after the end of apartheid, had a pre-emptive right in any subsequent selloff by Chevron.

Last week the Competition Tribunal approved, with conditions, the proposed merger between Off The Shelf Investments (OTS) and CSA. Once this merger is completed, Glencore will take control of the new company. OTS has engaged Glencore Energy UK as its technical and financial adviser. Glencore is providing OTS with the funding to exercise its pre-emptive right.

The assets include the 110,000 barrel-per-day oil refinery in Cape Town, a lubricants plant in Durban as well as 845 service stations and other oil storage facilities. It also includes 220 convenience stores across South Africa and Botswana.

In 1936, a partnership between Chevron and Texaco created Caltex. In 1966, Caltex bolstered its standing as a key investor in South Africa with the construction of the refinery, which produces gasoline, diesel, jet fuel, liquefied petroleum gas, fuel oil, asphalt and other products. CSA also has interests in a lubricants manufacturing plant in Durban.

In its assessment of the proposed merger between OTS and CSA, the Competition Commission said that there were public interest concerns surrounding the deal, which included the impact on employment and the industrial sector and region.

Conditions agreed by OTS include the preservation of jobs after the merger, as well as the continuation with CSA retirees' medical aid subsidy, and the establishment of a development fund focused on the development of small businesses and black-owned businesses.