In a first step towards establishing an empowered liquid fuels business, Sasol Oil and Exel Petroleum today applied to the Competition Commission for approval to merge their businesses.
Sasol chief executive, Pieter Cox said that if the merger is approved, the merged company - Sasol Liquid Fuels Business - will incorporate all of the liquid fuels interests of both Sasol and Exel Petroleum.
A response by the Competition Authority is expected by no later than 31 Dec 03. Approval would enable the merged liquid fuels business to launch its operation on 1 Jan 04, which will also coincide with the termination of the longstanding Main Supply and Blue Pump agreements. Sasol gave notice of its intention to end these agreements five years ago and they expire at the end of Dec 03.
Cox said South African motorists would experience an excellent level of service and convenience at the ultra-modern Sasol service stations being opened in all provinces. Sasol will continue to utilise the successful Excel brand and continue to roll out service stations in Exel colours.
Exel chairman Jomo Sono said Exel will gain substantially: "We shall cover the entire value chain. We have a secure supply of product from the industry leader. We will have greater access to capital and technology for future expansion and the prospect of a meaningful share of SA's biggest and most competitive fuel company."
The merged business will include all of the two companies' assets in the liquid fuels business. They will cover the entire value chain commencing with crude oil procurement for Sasol's 64% stake in the Natref refinery and receiving blending components from the Synfuel refinery in Secunda. All of Sasol Oil's and Exel Petroleum's assets in distribution and marketing will be added as well as Sasol Oil's assets in the marketing and storage of Fuel Oil and its shareholding in companies such as Tosas (road binder business) and FFS (Fuel Firing Systems).
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