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Japan refiner TonenGeneral to acquire Mitsui Oil

12.18.2013  | 

The Tokyo-based refiner will acquire an 89.9% stake in Mitsui Oil. The unit of Mitsui & Co. has about 270 gas stations and jointly owns the Kyokuto Petroleum Industries Ltd. refining venture with TonenGeneral.

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By TSUYOSHI INAJIMA and YUJI OKADA
Bloomberg

TonenGeneral Sekiyu K.K., a Japanese oil refiner partly owned by ExxonMobil, agreed to buy Mitsui Oil to expand its retail sales.

The Tokyo-based refiner will acquire an 89.9% stake in Mitsui Oil, it said Wednesday in a statement. The unit of Mitsui & Co. has about 270 gas stations and jointly owns the Kyokuto Petroleum Industries Ltd. refining venture with TonenGeneral. The transaction, valued at 24.9 billion yen ($242 million), is set to be completed Feb. 4 after it gets approval from Japan Fair Trade Commission, TonenGeneral said.

Japanese refiners, hurt by declining demand for oil products, are under pressure to restructure to better compete with Asian competitors. Kyokuto Petroleum and Cosmo Oil Co. agreed in September to consider joint operations of their Chiba refineries after ExxonMobil, the world’s biggest oil company by market capitalization, reduced its voting rights in TonenGeneral to 22% from about 50.5% last year.

“By acquiring efficient sales channels, TonenGeneral would be able to strengthen its supply chain” and have more unified refinery operations, Hidetoshi Shioda, a Tokyo-based analyst at SMBC Nikko Securities Inc., said before the announcement. The deal would “help TonenGeneral boldly seek an alliance with other companies.”

TonenGeneral is in talks with other stakeholders of Mitsui Oil to boost its stake in the refiner to about 95% by the end of March 2014, it said. Mitsui Oil’s other shareholders include Sumitomo Mitsui Banking Corp., Sumitomo Mitsui Trust Bank Ltd. and Mitsui O.S.K. Lines Ltd., TonenGeneral said.

Separately, Mitsui & Co. agreed to buy a 6.4% stake of TonenGeneral from Exxon for 33.6 billion yen, the Japanese trading company said in a statement.

Cooperative relationship

“Mitsui will seek to deepen its cooperative relationship with TonenGeneral through the continued transaction of crude oil and petroleum products,” the trading company said in the statement.

The Kyokuto Petroleum joint venture operates the 175,000-bpd Chiba refinery near Tokyo, according to Mitsui Oil’s website. TonenGeneral owns three refineries with combined capacity of 661,000 bpd, according to its website.

Mitsui Oil had net income of 3.5 billion yen and revenue of 367.5 billion yen in the year ended March 31, TonenGeneral said. TonenGeneral posted profit of 54.8 billion yen and sales of 2.8 trillion yen in the year ended Dec. 31, 2012.



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