Bangchak Corporation Plc (BCP) has announced the completion of its acquisition of Esso Thailand Limited from ExxonMobil Asia Holdings Pte. The US$645 million dollar deal was concluded yesterday with the purchase of 65.99% of shares at a price of 9.89 baht per share.
The transaction significantly expands BCP’s asset portfolio, which includes refineries, gasoline logistics, retail, and land.
In an effort to consolidate ownership, Bangchak launched on Tuesday a tender offer from investors on the Thai Stock Exchange for the remaining 34.01% of shares for 9.89 baht per share.
The transaction will take place between September 8 and October 12, with an anticipated cost of US$332 million.
The acquisition of Esso Thailand in its entirety is worth US$976 million. This includes the US$645 million dollar purchase from ExxonMobil Asia Holdings and the US$332 million tender offer.
“New development of an oil refinery complex similar to that of Esso Thailand is estimated to cost more than US$3 billion, excluding oil stations, crude and refined oil, and time value of the brand,” said Chaiwat Kovavisarach, CEO and President of BCP.
Bangchak CEO Chaiwat Kovavisarach shows the Esso purchase agreement worth $ 645 Million
Bangkok Bank Plc inked a US$912 million dollar loan arrangement on Tuesday to finance the acquisition, with the remaining US$655 million coming from Bangchak’s cash on hand.
Mr Chaiwat stated that the renaming of Esso to Bangchak will take place in November, following the completion of the tender bid procedure.
According to him, this transformation will extend to locally owned and operated petrol stations, giving them the option of aligning with the Bangchak brand or switching to other oil brands.
“This acquisition represents a significant step forward in strengthening energy security while aligning with our long-term strategy for sustainable and affordable energy.” “I believe this transaction marks the beginning of a new and promising chapter for both BCP and Thailand,” Mr Chaiwat said.
He stated that once finalised, the acquisition will increase BCP’s capacity from 174,000 to 294,000 barrels per day (BPD).
As of yesterday, Esso’s oil pumps at 832 service stations were expected to merge with BCP’s current 1,361 units, for a total of 2,193 units.
Bangchak, according to Mr Chaiwat, stands to benefit not only from a supplementary refining portfolio that improves gasoline supply security and flexibility, but also from an expanded network of service stations around the country, allowing for more extensive customer care.
He believes that cost reductions of 2-3 billion baht per year have the potential to generate major synergies.
According to Mr Chaiwat, the sharing of knowledge and technology will improve employee skills and capacities, which will better customer experiences and prepare Bangchak for an energy transition.
ExxonMobil retains the finished lubricant and chemical marketing businesses as part of the agreement.