ExxonMobil to sell downstream operations in Thailand
Photo courtesy of Bangchak

ExxonMobil to sell downstream operations in Thailand

ExxonMobil has reached an agreement with Bangchak Corporation Public Company Limited (BCP) to sell its interest in Esso Thailand. The sale includes the 174,000 barrel-per-day Sriracha Refinery, a network of distribution terminals, and more than 700 Esso-branded service stations.

ExxonMobil will continue to supply the Thailand market with branded finished lubricants and chemical products through a new company to be formed. ExxonMobil’s upstream operations through its affiliate ExxonMobil Exploration and Production Khorat Inc., and ExxonMobil’s Bangkok Global Business Center, which employs about 2,000 people, will not be impacted by ExxonMobil’s exit from its downstream business in Thailand.

The U.S.-based energy major said the sale delivers on its commitment to strengthen value and overall competitiveness.

Bangchak Corp. entered into the share purchase agreement with ExxonMobil for the acquisition of 2,283,750,000 ordinary shares of Esso Thailand on January 11.

The transaction will be executed by ExxonMobil’s affiliate, ExxonMobil Asia Holdings Pte. Ltd, which holds a 65.99% interest in Esso Thailand.

The transaction is expected to close in the second half of 2023, subject to standard closing conditions and applicable legal requirements, including approval from regulatory authorities.

Bangchak Corp. will subsequently launch a tender offer for the remaining ordinary shares of Esso Thailand after the completion of the transaction with ExxonMobil.

“As we execute our strategy, 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,” said Karen McKee, president of ExxonMobil Product Solutions. “We appreciate the talent and determination of our colleagues in Thailand who have safely provided reliable product supply to the Thailand and Greater Mekong markets for more than 125 years, and we thank them for their dedicated service.”

Chaiwat Kovavisarach, Group chief executive officer and president of Bangchak Corp., said “This investment is a step towards greater energy security, balancing our long-term strategy with energy affordability and sustainability. I believe this transformational transaction marks the beginning of a new chapter for BCP and for Thailand.”

The acquisition values Esso Thailand at a fixed enterprise value of THB55.5 billion (USD1.6 billion), subject to agreed adjustments, which implies an indicative price of THB8.84 (USD0.26) per share based on third-quarter 2022 financials.

The transaction is fully funded via a secured bank loan and Bangchak Corp.’s cash on hand. The final purchase price per share will only be determined upon completion of the transaction and will be calculated based on the latest audited or reviewed financial statements on the completion date.