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The Chinese oil giant wins regulatory approval for its $900m bid but must meet conditions.

Chinese oil giant Sinopec has won regulatory approval for its $900m bid for SA’s second largest oil company, Chevron SA — but it could still be trumped by a rival bid from Chevron SA’s empowerment shareholders, who are backed by Glencore.

The Competition Tribunal gave the go-ahead to the Sinopec deal on Friday, after Sinopec agreed to two additional conditions in response to complaints by Chevron SA’s branded marketers.

The 10 branded marketers, mini-oil companies that control more than two-thirds of the fuel Chevron retails in SA, had complained at tribunal hearings that they had not been adequately consulted and were concerned about their future, especially given Sinopec’s ultimate intention to rebrand Chevron SA’s 885 Caltex filling stations.

The two new conditions aim to ensure Sinopec picks up some or all of the rebranding costs of the filling stations and does not change any contracts with the branded marketers to their detriment.

These conditions add to the far-reaching public interest conditions, which Sinopec had already agreed to with Economic Development Minister Ebrahim Patel, and which have now been made conditions of the tribunal’s approval of the deal.

These include a commitment by Sinopec to invest R6bn in upgrading Chevron’s Cape Town refinery and a further R215m in a development fund to support small black-owned suppliers, as well as an undertaking that Sinopec sets up its regional head office in SA and maintains or increases local procurement and black-empowerment ownership.

It is understood that the rival bidders would have to match all the conditions if they want to gain the approval of Patel and of the competition authorities for their deal.

The rival bid came about when Chevron SA’s 23% empowerment partner — a consortium led by Mashudu Ramano’s African Legend Investments — exercised its pre-emptive right in September to match the Sinopec offer, with financing from global oil trader Glencore.

If Ramano’s consortium, Off The Shelf Investments Fifty-Six (OTS), succeeds in exercising its pre-emptive right, Glencore would in turn buy the Chevron SA stake off OTS. Glencore was one of the original, unsuccessful bidders for the Chevron SA stake when US-based Chevron Global Energy put it up for sale in 2016.

Hong Kong-based Sinopec is China’s largest petroleum refiner and the world’s second-largest petrochemicals com-pany and its bid for Chevron SA, which is worth more than $1.5bn, including the Cape Town refinery investment, is the largest to date by a Chinese company for a controlling stake in a South African company.