Esso deal took one year to close, says Bangchak CEO
Bangchak Corporation Plc began planning to take over petroleum refining company Esso (Thailand) Plc four years ago, and it took one year of negotiations before the deal was sealed, said Chaiwat Kovavisarac, the Thai petroleum and energy conglomerate’s CEO and president.
On Thursday, Bangchak announced it had acquired 65.99% of Esso (Thailand)’s ordinary shares from ExxonMobil Asia Holdings Pte Ltd. The stake was valued at 55.5 billion baht.
Both Bangchak and Esso (Thailand) are listed on the Stock Exchange of Thailand.
After the takeover, Chaiwat said that Bangchak began planning to acquire more petroleum refineries four years ago as part of its business expansion, as petroleum would remain the company's major money-maker.
“We had serious negotiations with ExxonMobil for a full year,” he said, pointing out that Esso has the capacity to procure crude oil from around the world and is experienced in managing large refineries.
Under the takeover deal, Bangchak will acquire Esso refineries with a total capacity of 174,000 barrels per day, Esso’s network of petroleum warehouses, and more than 700 of its petrol stations across the country.
Bangchak will continue to employ workers at the service stations.
Bangchak’s rebranding of the existing Esso service stations is expected to be completed within two years.
With the business merger, Bangchak will have a combined refinery capacity of 294,000 barrels per day and about 2,100 service stations throughout the country.
Esso will keep its brand for a variety of chemical and petroleum products, including lubricant oil.