Japanese refiner Idemitsu Kosan Co and smaller rival Showa Shell Sekiyu will merge on April 1 next year, the two companies said on Friday.
Japan’s No.2 and No.5 refiners by revenue agreed last November in a deal worth about $4 billion to create the nation’s second-biggest refiner sometime between October 2016 and the following April.
An Idemitsu spokesman said the company had expected to receive approval from the Japan Fair Trade Commission by the end of June on the purchase of Royal Dutch Shell’s one third stake in Showa Shell, but that the review was taking more time than expected. He did not give further details.
An official with the Fair Trade Commission was not immediately available for comment.
Idemitsu said it now planned to acquire Showa Shell shares in September, delayed from its previous goal of before the end of June.
The Japanese government has been encouraging consolidation in the refining sector, where five big firms and three smaller ones were vying for business in a country where a shrinking population is increasingly opting for more fuel efficient vehicles.
Japan’s JX Holdings and TonenGeneral Sekiyu agreed in December to merge in April 2017, joining forces to create a dominant player in a refining market that is in long-term decline.
Together, Idemitsu Kosan and Showa Shell control about 28 percent of Japan’s refining market, lagging behind JX Holdings, which has a 35 percent share. (Reporting by Osamu Tsukimori)