Mergers & Acquisitions

Colombian agency rejects Terpel’s bid to purchase ExxonMobil’s fuel business

Colombian agency rejects Terpel's bid to purchase ExxonMobil's fuel business
Photo courtesy of Terpel.

Colombia’s competition watchdog, the Superintendent of Industry and Commerce (SIC), has rejected Bogota-based oil and gas company Organizacion Terpel SA’s bid to purchase ExxonMobil’s fuels business in the country. Terpel, which is controlled by Chile’s Empresas Copec SA, also has operations in Mexico, Chile, Panama, Ecuador and the Dominican Republic.

Terpel and ExxonMobil together control 54% of Colombia’s fuels market. As a result of SIC’s ruling last week, one of Terpel’s competitors such as Texaco, Biomax or Petrobras could potentially benefit.

SIC has ordered the transfer of ExxonMobil’s fuel operations to a third party, such as an investment fund, to guarantee that Terpel does not acquire the fuels business. The business will have to be sold within nine months to a local or foreign buyer with the necessary financial and technical capability to operate it, the regulator said.

However, SIC approved Terpel’s acquisition of ExxonMobil de Colombia’s lubricants business, subject to conditions, including the sale of the Maxter and Maxter Progresa brands, as well the lubricants manufacturing plant in Colombia within nine months.

Copec signed a deal with ExxonMobil to buy the latter’s fuels and lubricants business in Colombia and Ecuador in November 2016, as part of a wider production and distribution partnership. The transaction included an investment of up to USD 747 million, of which USD 512 million corresponding to the equity value of the units while the remainder represents cash for the offloaded entities at the time of closing. Copec said at the time it will immediately resell the Colombian fuel business as it is not in line with its strategic focus.

The deal is estimated at COP 2 trillion (USD 700.3 million), which corresponds to 18% of Terpel’s revenues in the third quarter of 2017.

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