Glencore-Chevron: Patel squeezes great deal for SA
Although the minister’s portfolio is small, he succeeded in leveraging his power to broker a better outcome
Economic development minister Ebrahim Patel has once again helped to ensure a major merger gives back more to SA than one might expect.
The Competition Tribunal last week approved Glencore’s acquisition of the Chevron SA assets, and it was Patel who stepped in to ensure that more commitments were squeezed out of the global natural resources company, over and above what previous bidders had agreed to.
The merger will have many of the same conditions that the tribunal required of Hong-Kong-based Sinopec, which came close to buying the assets.
Glencore will not only have to comply with a number of conditions imposed on the other two but it will also have to beef up its empowerment shareholding to 35% within seven years post-merger. Sinopec was required to attain 29%.
As a global resources company with a hand in countless markets, Glencore must also now assist SA-manufactured products to reach its fuel retail outlets in other countries.
This is not the first time Patel has made the most of such an opportunity.
Who can forget his intervention in the merger of SABMiller and AB InBev in which a number of public interest commitments were obtained from the world’s largest brewer. Before that, when Coca-Cola wanted to buy a majority stake in Coca-Cola Beverages Africa, Patel again took the opportunity to elicit even better public interest commitments out of the soft drink manufacturer.
Although the minister’s portfolio is small, he succeeded in leveraging his power to broker a better deal for SA.