Japan's Idemitsu oil eyes $4bn buyout

GMT 19:23 2014 Saturday ,20 December

Arab Today, arab today Japan's Idemitsu oil eyes $4bn buyout

Japan's second-largest oil distributor
Tokyo - AFP

Japan's second-largest oil distributor Idemitsu Kosan is planning to acquire its smaller rival Showa Shell Sekiyu in a deal worth an estimated $4.18 billion, a report said Saturday.
The deal, which would create a firm controlling nearly one third of the domestic market, would see Showa Shell's largest shareholder, Anglo-Dutch oil major Royal Dutch Shell, selling shares in a tender offer, the Nikkei business daily said without naming its sources.
Royal Dutch Shell will likely exit the oil-refining and sales business in Japan, due to thin margins caused by fierce competition, it said.
Idemitsu, which plans to turn Showa Shell into a subsidiary, would become number two in Japan's oil distribution sector, behind JX Nippon Oil & Energy, the Nikkei said.
Idemitsu and Showa Shell are expected to sign a basic agreement as early as February, with the tender offer to be launched pending regulatory approval, it said.
Domestic demand for petrol has declined in Japan in recent years due to its ageing population and the growing popularity of fuel-efficient vehicles.
The two companies were not immediately available to comment on the report.


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