Nippon Oil, Nippon Mining Agree to Marge

Nippon Oil Corporation and Nippon Mining Holdings announced on Thursday they reached basic agreement to integrate the management of both parties. They launch the integrated holding company in October 2009 to restructure the companies’ businesses into 3 core business companies for oil refinery and sales, oil development and metals. They try to realize more than 60 billion yen per year of synergy in 3 years eyeing more than 100 billion yen of synergy in future. The consolidated groups’ annual sales are 12 trillion yen and the recurring profit is around 470 billion yen based on the year to March 2008.

They agreed Nippon Mining & Metals is core business company after the merger. They launch new 2 business companies in April 2010 for oil refinery and sales and oil development by consolidating Nippon Oil Company and Japan Energy, and Nippon Oil Exploration and Japan Energy’s unit. They try to reduce oil refining capacity by 400,000 barrels in 2 years.

Nippon Mining Holdings decided the merger for the whole company including metals, not only for Japan Energy when the next growth strategy for metals and new energy business including copper mines development in Chile and Peru needs more larger financial background.