Oil giant, Shell Plc, and its South African partner are close to ending a valuation dispute, paving the way for the sale of the oil giant’s local downstream assets of as much as $1 billion.
This was announced on Thursday by insider sources familiar with the matter, according to a recent report by Bloomberg.
These sources confirmed that Thebe and Shell are now on the verge of reaching a consensus on breaking the deadlock.
The disagreement between the twocompanies started in 2022 when Thebe intended to sell its share, and the parties couldn’t agree on the holding’s worth.
However, Shell earlier announced in 2024 that they will divest their majority shareholding from a local South African downstream unit after a comprehensive review of its businesses across all regions to reshape the downstream portfolio.
Meanwhile, Thebe dismissed claims in May 2024 that Shell’s planned exit from SA forecourts was due to a strained relationship between the two companies, and Shell’s relationship with Thebe is not the reason for Shell exiting South Africa.
“Since April 2023, Thebe and Shell have held several meetings to try to resolve the valuation differences. These meetings have not been fruitful, and to resolve the impasse, Thebe has referred this matter to arbitration in terms of the provisions of the shareholders agreement. This process is underway,” Shell added.
The London-based company has a network of 600 service stations across the country, and Thebe Investment Corporation has a 28% stake in the local retail operation, bought in 2002 for about $70 million.
Experts suggested a potential deal could earn Thebe more than the $200 million valuation the company placed on its stake in 2022. This contrasts with Shell’s lower valuation of the same stake.
