Glencore to sell 51% in oil products storage business to China's HNA Group for $775 mn
01 April 2017
Commodity trading and mining giant Glencore Plc, yesterday struck a deal to sell a 51-per cent stake in its oil products and logistics business to China's HNA Innovation Finance Group Ltd, for $775 million in cash.
Its oil products and logistics business include assets in Argentina, Belgium and Madagascar.
Glencore will establish a new company called HG Storage International Ltd, which will consolidate its existing petroleum products storage and logistics businesses into a global portfolio of assets.
HG Storage will have an established presence in major trading hubs and strategically important locations across Europe, Africa and the Americas.
Upon closing, HG Storage will be governed by its own board of directors. HNA will have the right to appoint three directors to the board, alongside two Glencore-appointed directors.
Glencore and HNA have agreed to an initial three year lock-up period in respect of their interests in HG Storage.
Commenting on the transaction, Alex Beard, head of Glencore Oil, said, ''We are pleased to be entering into a partnership with HNA to further develop our global petroleum products storage and logistics business.''
''HG Storage brings together Glencore's expertise in the petroleum products storage business and extensive market knowledge with HNA's global reach and strong position in Asia. HG Storage's high quality assets are well positioned to take advantage of the future opportunities we expect to be created by the strong market fundamentals for the sector,'' he added.
HNA Innovation Finance Group Ltd is part of HNA Group, a Fortune 500 Company, which has grown from a local aviation transportation operator into a multinational conglomerate encompassing aviation, airport management, financial services, real estate, retail, tourism, and logistics.
The group has assets worth over $90 billion, has 11 listed companies, annual revenues of $29 billion and employs nearly 180,000 worldwide.
It has a fleet of over 820 aircrafts, serves nearly 700 domestic and international routes, flies to over 200 cities, and serves 77.4 million passengers annually.
It has recently gone on an acquisition spree and offered to buy Swiss catering and hospitality company Gategroup in April for $1.5 billion, struck a deal in February to buy US electronics distributor Ingram Micro Inc for about $6 billion and paid $2.73 billion to buy airport luggage handler Swissport International Ltd.
It is also the biggest shareholder in Spanish hotel company NH Hotel Group SA and last year, acquired 25 per cent in Hilton Worldwide Holdings Inc from private equity firm Blackstone Group for $6.5 billion.
It is currently in talks to buy a controlling stake in the owner of Forbes magazine.