Japanese largest oil refiner JX Holdings Inc. announced Thursday that it has agreed in principle to merge with its rival TonenGeneral Sekiyu K.K. in around April 2017 aiming at cutting refinery costs to counter declining demand in domestic market.
Through a share swap, the agreement would enable the two companies to cut costs by integrating or abolishing some of their refineries as increasing number of Japanese consumers are driving fuel-efficient cars and the use of renewable energy in the country is booming.
The merge of JX and TonenGeneral followed the integration announcement by the country's other two refiners Idemitsu Kosan Co. and the Showa Shell Sekiyu K.K. last month.
Idemitsu and Showa Shell are expected to merge by April 2017. JX and TonenGeneral, the No. 3 distributor by sales, will have combined sales of 14.3 trillion yen (about 116 billion U.S. dollars), compared with the 7.6 trillion yen of Idemitsu and Showa Shell combined.
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