The Competition Commission has approved a merger application filed jointly by Sasol Oil and BP Southern Africa (BPSA), in which the approval of a proposed joint venture (JV) between the two companies was requested.
The unincorporated JV will comprise the co-ownership of two strategically-positioned depots – the Alrode Fuel Depot in Alberton and the accompanying Beryllium site, both of which were previously owned exclusively by Sasol Oil; and the Waltloo Depot in Pretoria, which was previously owned exclusively by BPSA.
It is anticipated that the JV agreement will come into effect in the second half of 2012, once all the suspensive conditions have been met.
The two companies will own both depots in equal shares, which gives them equal access to the storage capacity of the depots. A JV agreement, read in conjunction with an operating agreement will govern the JV, generally, as well as the operations within the co-owned facilities.
“Meeting customers’ needs is a key priority for us and we can now reach customers quicker and more efficiently in the northern areas. We are pleased that BP Southern Africa saw the potential value in this partnership,” says Sasol South African Energy group executive Bernard Klingenberg.
“Ensuring security of supply in the areas we operate in is important to us and entering into a partnership such as this one helps us to achieve this strategic intent,” added BPSA CEO Gerard Derbesy.
In addition to bringing both companies closer to their customers, the JV will ensure that distribution is safer and more efficient through shorter road deliveries to customers, optimised operations and improved road safety associated with shorter delivery routes.
While a jointly-appointed executive committee will make the strategic decisions pertaining to the operation and maintenance of the JV, care has been taken to ensure that certain key matters will be referred to the executive management of each company.
Owing to the fact that the JV does not amount to no more than the co-ownership of the depots, the two companies will continue to operate independently as competitors in the industry.