ExxonMobil to sell Thai refinery, retail unit to Bangchak

EXXONMOBIL will sell its controlling stake in Esso (Thailand) that runs a local refinery and retailing business to rival Bangchak, as the largest US oil company focuses on its home market and production of lower-emission fuels.

Bangchak will acquire 66 per cent, or 2.28 billion shares, of Esso at a price to be determined later, the companies said in separate stock exchange filings on Thursday (Jan 12). It will also make a tender offer for the remaining 34 per cent of the stock after securing regulatory approvals.

Bangchak will gain control of Sriracha Refinery, some distribution terminals and a network of Esso-branded retail stations with the acquisition, which will help cement its position as a leading player in Thailand’s refining and marketing industry, it said. Bangchak will have a combined crude and products terminals capacity of approximately 15 million barrels that will enhance its reserves and energy security, the company said.

Exxon will continue to supply finished lubricants and chemical products in Thailand through a new company to be formed, it said in a statement. The company’s Bangkok Global Business Centre, which employs about 2,000 people, and the exploration and production activities will remain unaffected, it said.

“ExxonMobil is focusing its investments on global production facilities to meet the world’s demand for lower-emissions fuels and high-performance products while divesting assets where others see the potential for greater value,” Karen McKee, president of ExxonMobil Product Solutions, said in the statement.

Bangchak said Esso (Thailand) had an enterprise value of 55 billion baht (S$12.2 billion). Esso had a market value of 38.4 billion as of Wednesday’s closing price of 11.10 baht, according to data compiled by Bloomberg.

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The acquisition price of Esso shares will be finalised in accordance with the purchase agreement, Bangchak said. The deal is expected to be completed in 12 months, subject to regulatory approvals.

Bangchak’s biggest shareholder is Vayupak Fund, a state-controlled investment fund, according to data compiled by Bloomberg. BLOOMBERG