Idemitsu Kosan, Japan’s second-biggest oil refinery, said on Tuesday it will raise its stake in Fuji Oil to 13.04% from 6.58% by buying stake from Sumitomo Chemical and may raise its ownership to 20%.
The move is aimed at raising its competitiveness in the fuel sector through expansion of joint purchases of crude oil, as well as deepening collaboration in decarbonisation measures, Idemitsu said.
Under the agreement, Idemitsu will buy 5.05 million shares in Fuji Oil at 330 yen ($2.20) per share in an off-market transaction, an Idemitsu spokesperson said, adding it will consider making Fuji Oil an equity affiliate by making additional shares.
“We will consider raising our stake to 20% to make Fuji Oil an equity-method affiliate, but we are not considering purchasing any additional stake after that,” the spokesperson said.
The purchase price is lower than Fuji Oil’s closing price on Tuesday of 384 yen.
The transaction between Idemitsu and Sumitomo Chemical, which will make Idemitsu the top shareholder of Fuji Oil, is scheduled to take place on March 26, according to Fuji Oil.
“We see the deal (between Idemitsu and Sumitomo Chemical) as positive as the stronger capital alliance with Idemitsu will help enhance our business collaborations,” a Fuji Oil spokesperson said.
He declined to comment on a possible additional purchase of its shares by Idemitsu.
Source: Reuters.com