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Nippon Oil Eyeing Alliance With Teikoku Oil-INPEX Pair

Posted on: Thursday, 24 November 2005, 18:00 CST

Tokyo, Nov. 24 (Jiji Press)--Nippon Oil Corp. has decided to seek business alliance with the pair of Teikoku Oil Co. and INPEX Corp. , which are planning to merge their operations in April 2006.

Nippon Oil, Japan's top oil refiner and wholesaler, hopes to join hands with the two leading Japanese oil resources developers to establish a comprehensive development-to-wholesale system like the one that is adopted by international oil majors, senior Nippon Oil officials said.

In 2000, Nippon Oil became the top shareholder in Teikoku Oil with a stake of 16.5 pct, planning to integrate the operations of the two firms eventually. But Teikoku Oil agreed on business integration with INPEX earlier this month, posing a stumbling block to Nippon Oil's plan.

Teikoku Oil and INPEX will make the merger proposal at their respective extraordinary meetings of shareholders slated for January.

Nippon Oil boosted its stake in Teikoku Oil to 20.4 pct last week in an apparent effort to thwart the planned merger.

But Nippon Oil alone can no longer scrap the merger plan because it will not be able to secure at least one-third of voting rights needed to reject it at the shareholders' meeting of Teikoku Oil, the officials said.

As a result, Nippon Oil decided to accept the merger and, instead, seek cooperation among the three companies. In the future, Nippon Oil may buy shares in the planned holding company to be set up by Teikoku Oil and INPEX in April and propose three-way business integration, they said.END

Source: Jiji Press English News Service

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