Japan: JX Holdings, TonenGeneral consider merger due to weak market
Japan's leading oil refiner JX Holdings is in talks with rival TonenGeneral Seyiku about a merger, in an effort to face the current difficulties of the Japanese oil market.
The two companies plan to start full negotiations soon, hoping to reach an agreement before the end of the year, reported Reuters.
JX Holdings, parent company of wholesaler JX Nippon Oil and Energy Cor., operates a network of gas stations under the Eneos brands, while TonenGeneral runs Esso and other filling stations. The merger would potentially create a company that will control more than half of Japan´s refining market.
Both companies are experiencing difficulties in the present market, mainly due to the declining fuel demand of Japanese consumers. The improvement in car efficiency and an ageing population, topped by collapsed oil prices, has shrunk the revenues of refinery and wholesaler operators.
The merger between the market´s No. 1 JX Holdings and No. 3 TonenGeneral would swiftly dwarf next year´s merger between wholesaler Idemitsu Kosan Co. (No. 2) and fifth-ranking Showa Shell Sekiyu K.K., which boast combined annual sales of ¥7.6 trillion, as compared with the ¥14.3 trillion generated by JX Holdings and TonenGeneral.
