Idemitsu Kosan Co. announced Thursday that it has reached an agreement to sell Shell Lubricants Japan back to Shell, 16 months after the businesses merged.
The Tokyo-based refiner did not disclose the price of the transaction but said it will be completed at the end of December. Idemitsu Kosan said in March that it was negotiating the deal after deciding it was too difficult to manage competing lubricant brands. The company reiterated that rationale Thursday, stating that it will now focus on its Idemitsu lubricants business and expanding its global operations.
When it merged with Showa Shell in April of 2019, Idemitsu Kosan was the second-largest lubricant supplier in Japan, behind JXTG Holdings, which was created by the 2017 merger of JX Holdings and TonenGeneral Seikiyu K.K. Idemitsu Kosan managed the Idemitsu and Shell lubricant businesses separately, maintaining Shell Lubricants Japan as wholly owned entity.
Idemitsu Kosan pegged Shell Lubricants Japan’s capitalization at ¥310 million (U.S. $2.9 million).
The transaction is subject to review by the Japan Fair Trade Commission but is less likely to face obstacles than the merger did. If the sale is completed, Idemitsu Kosan will still be the second-largest lube supplier in Japan.