China National Chemical Corporation (ChemChina) will increase its stake in Mercuria Energy Group (Mercuria), while Mercuria will invest a minority stake in ChemChina’s onshore refineries and also increase its stake in ChemChina’s overseas trading companies, according to a statement on ChemChina’s website. The deal will provide Mercuria with crude supply and greater access to the domestic refining market in China.
The transaction is an increase of stake based on ChemChina’s initial minority investment in Mercuria in 2016.
After the deal, the two sides will enhance their cooperation in energy industries. The deal would be the first time a global trading house has gained a stake in a Chinese refinery company.
ChemChina already holds a 12 percent stake in Mercuria, and will remain a minority investor in the trading company.
ChemChina operates the country’s largest refinery system outside of the state-owned majors such as PetroChina Co. The company has a total processing capacity of 530,000 barrels per day, including three plants in Shandong province.
Mercuria is a leading global independent energy and commodities company with global operations and a strong presence in Europe, Asia and the Americas. The Group’s trading portfolio includes products along the entire energy value chain.
On January 18, 2016 ChemChina, one of China’s largest chemical companies, through its subsidiary ChemChina Petrochemical Co., Ltd, completed a strategic investment in Mercuria Energy Trading, one of the world’s largest independent integrated energy and commodities companies. ChemChina became an important minority investor with a 12 percent stake in the shareholding structure of Mercuria after the transaction.
ChemChina and Mercuria Energy Trading complement each other effectively with regard to knowledge offering and understanding of targeted markets. The strategy, organization, management, and corporate culture of the two organizations will serve to expand synergies on a global basis.
“An investment by ChemChina in our company reaffirms Mercuria’s business model as well as growth potential. ChemChina has important expertise and global reach. Combined with Mercuria’s experience, this will fuel and diversify our natural growth,” Marco Dunand, Chief Executive Officer of Mercuria Energy Group, said on that occasion.
“Through the investment in Mercuria Energy Trading, which has grown rapidly over the last decade, ChemChina will expand further into the energy sector,” added Ren Jianxin, Chairman of ChemChina. “Mercuria has growth opportunities ahead in China and around the world. We highly respect and trust its outstanding management team. We look forward to working with its management and employees,” the Chairman of ChemChina underlined.
ChemChina was established in 2004 on the basis of the affiliated enterprises of the former Ministry of Chemical Industry.
Headquartered in Beijing, ChemChina is one of the largest chemical groups in the People’s Republic of China with production, R&D and sales in 150 countries and regions. ChemChina is ranked 265th among the Fortune 500 companies and 9th in the global chemical industry.
ChemChina has successfully acquired nine industry-leading companies in France, the United Kingdom, Israel and Italy and others, including Pirelli, one of the world’s leading tire manufacturing enterprises, acquired in 2015 for 7.1 billion euros, and KraussMaffei, which was acquired for nearly 1 billion euros in Jan 2016, a famous manufacturer of machinery for processing plastics and rubber in Germany.
ChemChina Petrochemical Co., Ltd, known as the subsidiary being in charge of oil processing and trading business of ChemChina, has annual oil processing capacity of 25 million tons, and trading platforms in Singapore, London and Dubai. Morgan Stanley advised ChemChina in the transaction.