Glencore Sells 51% Stake in Petroleum Storage Business to China's HNA Group for $775 Million
March 31 2017 - 12:07PM
Dow Jones News
By Scott Patterson
Glencore PLC, one of the world's biggest oil traders, has agreed
to sell a majority stake in its petroleum products storage and
logistics business for $775 million in cash to Chinese conglomerate
HNA Group.
The move comes as China's demand for oil storage ramps up amid
rising consumption by its expanding urban population. China is the
world's second largest oil consumer, behind the U.S.
HNA Group will purchase a 51% stake in the petroleum business,
which will be called HG Storage International Ltd. The deal is
subject to regulatory approvals and is expected to close in the
second half of the year.
Switzerland-based Glencore said the joint venture would be
present in major trading hubs across the world, including in
Europe, Africa and North and South America.
The deal appears to allow Glencore to maintain the market
insight that traders can glean from oil storage, while adding to
its cash horde.
The company continues to try to cut its debt as it looks to
reinstate its dividend and scans the market for potential
investments. Earlier in March, Glencore entered a deal to sell
stakes in a pair of zinc mines for $400 million.
HNA Group, owned by Chinese tycoon Chen Feng, is a sprawling
Chinese conglomerate with assets spanning hotel chains,
supermarkets and shipping firms.
HNA has been active recently, acquiring a sizable stake in
troubled German lender, Deutsche Bank.
Write to Scott Patterson at scott.patterson@wsj.com
(END) Dow Jones Newswires
March 31, 2017 11:52 ET (15:52 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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