Following the announcement on November 12, 2015 of the Idemitsu-Showa Shell merger, JX Holdings Inc., parent of JX Nippon Oil and Energy Corp., and TonenGeneral Sekiyu K.K., Japan's third-largest oil refiner, are in merger talks, informed sources said last Monday.
The two companies plan to start full negotiations soon hoping to reach an agreement by the end of the year, as sought by TonenGeneral, the sources said.
Speaking to reporters in Tokyo, JX Holdings Chairman Yasushi Kimura acknowledged the company was in talks with TonenGeneral in many ways.
If JX Holdings and TonenGeneral merge, their combined annual sales will total about ¥14.3 trillion (US$116 billion), much larger than the approximate ¥7.6 trillion that would be generated by the recently announced Idemitsu-Showa Shell merger.
JX Holdings owns seven refineries and TonenGeneral four. JX Holdings operates gas stations under the Eneos brand, while TonenGeneral operates Esso and other gas stations.
In a November 16, 2015 announcement, TonenGeneral Sekiyu stated "Regarding todays media coverage about business merger between TonenGeneral Sekiyu K.K. and JX Holdings, Inc., the reports are not based on any announcement by TonenGeneral Sekiyu K.K. In order to increase the corporate value and strengthen the competitiveness of TonenGeneral Sekiyu K.K., it is considering various options including seeking alliance with partners not only to reinforce our core petroleum and petrochemical businesses but also to develop other growth options. However we have nothing to announce at this moment nor have we made any material decision. We continue to seek options to reinforce our core businesses and develop growth options which incorporate our values such as integrity, safety, efficiency, flawless execution, and general
interest perspective".
JX Nippon has three lube base oil plants, in Mizushima (two) and in Negishi with a capacity to produce a total of 11,900 bpd of Group I and 400 bpd of Group III base oils.
TonenGeneral has a base oil plant in Wakayama with a capacity to produce 7,100 bpd of Group I base oil.
