Clifford Chance has represented private equity firm The Carlyle Group on its joint acquisition with China-based conglomerate Huo’s Group of Royal Dutch Shell's 75 percent controlling stake in Tongyi Lubricants, a manufacturer of liquids such as greases and engine oils.
Tongyi, which has plants at Xianyang in Shaanxi province and Wuxi in Jiangsu province, was sold for an undisclosed amount. Carlyle Asia Partners IV will provide Carlyle's equity investment for the deal.
Hong Kong partner Simon Cooke led the Clifford Chance team. The financial and anti-trust aspects of the transaction were handled by partners Anthony Wang and Matthew Truman in Hong Kong, and Richard Blewett in Beijing.
Zhong Lun Law Firm advised Huo’s Group, while Han Yi Law Offices provided Carlyle with guidance on PRC law.
Offloading its stake will allow Shell to exit Tongyi – a joint venture between the Anglo-Dutch energy giant and Huo’s Group – by the end of 2015 or early 2016. This comes as Shell works to revamp its global “downstream” business by selling some of its refineries and retail divisions in markets including Australia, Italy and Japan.
Shell, however, intends to retain a foothold in China’s lubricants sector. Earlier in June, it established a lubricant-blending facility in Tianjin. According to Shell, the plant has the capacity to make 330 million litres of finished lubricants per year – enough to supply over 65 million cars.
