Japanese oil company Idemitsu Kosan has decided to delay indefinitely its planned merger with oil refining company Showa Shell Sekiyu, due to the fierce opposition of the Idemitsu founding family, which owns just over a third of Idemitsu Kosan.
The take over of Showa Shell Sekiyu by Idemitsu Kosan was expected to be carried out in two stages, with the acquisition of a 33.3% stake from Shell for Yen 170bn (US$1.7bn) by the end of the 2016; Idemitsu Kosan would have then purchased the rest of Showa Shell Sekiyu's shares through a share swap. The Idemitsu family is also opposed to the acquisition of a 33.3% stake from Shell.
The merger was announced in November 2015 and expected on 1 April 2017. It was expected to create the second largest oil refining company in Japan, with a combined company controlling around 28% of the refining market in Japan, behind JX Holdings (35%, to merge with TonenGeneral Sekiyu in April 2017 too).
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