Exxon Mobil Corp is planning to sell its controlling stake in Esso (Thailand) PCL, which runs a local refinery and retailing business, to rival Bangchak Corp, as the largest US oil company focuses on its home market and the production of lower-emission fuels.
Bangchak is to acquire 66 percent, or 2.28 billion shares, of Esso at a price to be determined later, the companies yesterday said in separate stock exchange filings.
It would also make a tender offer for the remaining 34 percent of the stock after securing regulatory approvals.
Photo: AFP
While the firms did not specify a value for the deal, saying it would be subject to an “adjustment mechanism” under the share purchase agreement, Exxon’s stake in Esso was valued at 23 billion baht (US$688.3 million) at its closing price on Wednesday.
Bangchak said Esso had an enterprise value of 55 billion baht, implying an indicative purchase price of 8.84 baht per share based on its third-quarter financials.
The acquisition would be fully funded by secured bank loans and cash on hand, Bangchak said, adding that the deal is expected to be completed within 12 months, subject to regulatory approvals.
Photo: REUTERS
Bangchak would also gain control of Sriracha Refinery, some distribution terminals and a network of Esso-branded retail stations in the acquisition, which would help cement its position as a leading player in Thailand’s refining and marketing industry, it said.
Bangchak is to have a combined crude oil and oil products terminals capacity of approximately 15 million barrels, which it said would enhance its reserves and energy security.
The acquisition would increase the company’s refinery capacity by 174,000 barrels per day to a total of 294,000 barrels a day, and boost the number of Bangchak’s retail gasoline stations to more than 2,100.
Exxon would continue to supply finished lubricants and chemical products in Thailand through a new company to be formed, it said in a statement.
The company’s Bangkok Global Business Center, which employs about 2,000 people, and its exploration and production activities would remain unaffected, it said.
“ExxonMobil is focusing its investments on global production facilities to meet the world’s demand for lower-emissions fuels and high-performance products, while divesting assets where others see the potential for greater value,” ExxonMobil Product Solutions president Karen McKee said in the statement.
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