Idemitsu Kosan announces delay in planned merger with Showa Shell
Idemitsu Kosan Co. announced that the merger with Showa Shell Sekiyu K.K., which was originally planned for April 2017, has been delayed to an indefinite date. With a shrinking domestic oil demand, the merger would have given the merged entity a 30% share of the Japanese market.
In a statement on its website, Idemitsu Kosan announced that “…it is our strong regret that the basis for constructive discussions for the merger is not currently in place due to difficulties in consultations with some stakeholders.”
The Asian Wall Street Journal reported that Idemitsu Kosan’s management has not been able to persuade the company’s honorary chairman and former president, 89-year-old Shosuke Idemitsu, whose family has a controlling stake in Idemitsu Kosan, to agree to the merger so far.
“Under such circumstances, to secure enough time for both companies to discuss with their respective stakeholders, we have decided that it is not appropriate to set the effective date of the merger at this moment. Therefore, we hereby announce as follows: We will continue discussions in connection with business integrations that would enhance the competitiveness of both companies, and we will make a further prompt announcement when appropriate.”
Royal Dutch Shell PLC owns approximately a one-third stake in Showa Shell Sekiyu.