JX Nippon Oil & Energy to buy Nagoya-based gas station operator

JX Nippon Oil & Energy Corp. said it will buy Nagoya-based gas station operator Ikko Co. on July 2, for ¥10 billion (US$127.4 million). Ikko’s annual sales of about 1.83 million kiloliters make up less than 1% of Japan’s demand for diesel fuel. But the company’s solid nationwide sales channels in the diesel fuel business, combined with JX’ extensive network of refineries, could be a significant advantage to the combined firm. Ikko is a well-known brand only in its Nagoya hometown and to operators of fleet vehicles. It has service stations for companies with large fleets of trucks and specializes in diesel sales. Domestic demand for diesel fuel totaled 32.9 million kiloliters in fiscal 2011, down about 30% from the peak in fiscal 1996. But the decline has been more modest in the fleet business than in retail sales, though margins are lower. Ikko runs 176 gas stations directly and operates another 43 through wholesale clients around Japan. It has the second largest network of fleet refueling stations in the country. JX Senior Vice President Tsutomu Sugimori said the acquisition will strengthen Ikko’s network and give it options that it could not have taken by itself.