Oil retailer San-Ai Oil Co. said Friday it will purchase Kygnus Sekiyu K.K., an oil distributor affiliated with Exxon Mobil Corp., in December.
San-Ai did not disclose the value of the deal.
The deal will provide San-Ai with Kygnus’ network of about 680 gas stations nationwide, while enabling it to cut gasoline purchasing costs and deepen ties with Exxon Mobil, one of the world’s biggest oil companies.
Kygnus is equally owned by TonenGeneral Sekiyu K.K., an oil refinery and wholesaler affiliated with Exxon Mobil, and seafood trading house Nichimo Co.
Under the transaction, all 154,600 outstanding Kygnus shares held by TonenGeneral and Nichimo will be transferred to San-Ai.
Commanding a 2.3 percent share of gasoline sales, the eighth-largest in Japan, Kygnus earned 1.01 billion yen in pretax profit on revenue of 355.18 billion yen in the 2003 business year to last December.
TonenGeneral said it will continue to supply gasoline and other petroleum products on a long-term basis to Kygnus even after Kygnus is brought under San-Ai’s wing.
The San-Ai group has a network of around 800 directly run gas stations.
The deal will boost San-Ai’s gas station network to about 1,480, grabbing third place behind the 4,500 run by the National Federation of Agricultural Cooperative Associations and Itochu Enex Co.’s network of about 2,100 locations.
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