MOSCOW (MRC) -- Japanese refiner Idemitsu Kosan Co. and smaller rival Showa Shell Sekiyu will merge on April 1 next year, the two companies said.
Japan's No.2 and No.5 refiners by revenue agreed last November in a deal worth approximately USD4 B to create the nation's second-biggest refiner sometime between October 2016 and April 2017.
An Idemitsu spokesman said the company had expected to receive approval from the Japan Fair Trade Commission by the end of June on the purchase of Royal Dutch Shell's one third stake in Showa Shell, but that the review was taking more time than expected. He did not give further details.
An official with the Fair Trade Commission was not immediately available for comment.
Idemitsu said it now planned to acquire Showa Shell shares in September, delayed from its previous goal of before the end of June.
The Japanese government has been encouraging consolidation in the refining sector, where five big firms and three smaller ones were vying for business in a country where a shrinking population is increasingly opting for more fuel efficient vehicles.
Japan's JX Holdings and TonenGeneral Sekiyu agreed in December to merge in April 2017, joining forces to create a dominant player in a refining market that is in long-term decline.
Together, Idemitsu Kosan and Showa Shell control about 28% of Japan's refining market, lagging behind JX Holdings, which has a 35% share.
As MRC informed previously, in July 2015, Idemitsu signed an agreement to acquire Shell’s 33.24% stake in its Japanese venture Showa Shell Sekiyu KK for JPY 169 billion (approximately USD1.4 billion).
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC