The Fair Trade Commission of Japan has approved the merger of Japanese oil company Idemitsu Kosan and oil refining company Showa Shell Sekiyu, triggering the completion of the sale by Shell of its 31.2% interest in Showa Shell Sekiyu to Idemitsu Kosan, for a total amount of JPY159bn (around US$1.4bn).
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%). However, the fierce opposition of the Idemitsu founding family, which owns just over a third of Idemitsu Kosan, has blocked the planned merger, prompting the company to delay it indefinitely. Idemitsu will now apply with the Fair Trade Commission to proceed with the merger plans if its succeeds in persuading the founding family.
In addition, the FTC has approved the merger of JJ Holdings, the largest oil refining company in Japan, and its rival TonenGeneral Sekiyu. The new company, named JXTG Holdings, will operate three large refineries in the Tokyo Bay, control half of the Japanese gasoline market and operate more than 14,000 retail gasoline outlets in the country.