You are here
Japan's Idemitsu to buy 33% of Showa Shell by year-end: Nikkei
[TOKYO] Japanese refiner Idemitsu Kosan Co will acquire one-third of Showa Shell by the end of the year, and the anti-monopoly watchdog is expected to approve their merger proposal as early as next week, the Nikkei business daily said on Saturday.
Idemitsu will go ahead with an agreement to acquire the 33.24 per cent stake in Showa Shell for about 170 billion yen (S$2.1 billion) from Royal Dutch Shell after getting the approval, the report said, without citing sources.
The planned merger has been a drawn-out process, with fierce opposition coming from Idemitsu's founding family. The management of Idemitsu, Japan's second-biggest refiner by sales, in October put a full takeover on hold indefinitely.
Idemitsu's management has argued that a merger is the best course of action in a shrinking domestic oil market, where five large and three small refiners compete.
But descendants of founder Sazo Idemitsu, including octogenarian son Shosuke Idemitsu, now honorary chairman, have said the businesses are too different for a merger to work.
Another merger in the domestic refining sector, involving JX Holdings Inc's planned acquisition of TonenGeneral Sekiyu KK, is under way.
Japan's Fair Trade Commission is also expected to approve that merger as early as next week, the Nikkei report said.
Pressure to consolidate, both within the refining industry and from the government, has been high as Japan's gasoline demand declines due to a shrinking population.