Nippon Oil Corp, the largest oil distributor in Japan, and the country’s sixth-largest distributor, Nippon Mining Holdings Inc, said Thursday they will merge their businesses in October 2009 in a move that will create the world’s eighth-largest oil company in terms of group sales. The deal comes at a time when oil companies are struggling to combat sharp falls in crude oil prices and dwindling petroleum demand due to the global economic recession. The two plan to establish a holding company that will supervise the operating companies to be set up by business sectors. Within three years of integration, Nippon Oil President Shinji Nishio said the two firms expect to save at least 60 billion yen annually in petroleum refinery and sales costs, and eventually expect to post more than 100 billion yen a year in synergy effect. Nishio also said the integrated company will aim to cut crude refining capacity by 400,000 barrels per day within two years after the merger.
Source: Japan Today
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