Ireland’s DCC Energy has given a binding offer of €464m ($529m) to Anglo-Dutch multinational oil and gas firm Royal Dutch Shell (Shell) for acquiring the latter’s Butagaz Liquefied Petroleum Gas (LPG) business in France.
Shell has granted exclusivity to the Irish firm for the deal, and is currently in talks with the staff councils of both Butagaz and Shell France, as required under the French law.
The deal is in line with Shell’s strategy to exit from LPG business across the globe.
Shell said that the reduction of downstream footprint to a smaller number of assets will help the company in focusing on markets where it can compete better.
The deal, however, will need to obtain regulatory approval after it is finalised by both the firms.
Shell expects the transaction to be concluded by the end of the year.
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By GlobalDataThe firm has already sold off multiple such assets, which comprise of its refineries in Britain, Germany, France, Norway and the Czech Republic and parts its retail businesses in the UK and Norway.
DCC has previously purchased BP and Statoil’s (STL.OL) LPG businesses. The firm acknowledged that the proposed deal will be its largest acquisition till date, will turn it into the third-largest LPG distributor in Europe.
DCC chief executive Tommy Breen said: "The acquisition of Butagaz represents a major step forward in DCC’s ambition to build a very significant presence in the global LPG market.
"As the leading LPG brand in France with a strong heritage and reputation for customer service, Butagaz is an excellent strategic fit for DCC Energy’s existing LPG business."
Butagaz holds a market share of 25% and is the leading LPG brand in France. It operates across LPG cylinder and small bulk market segments and serves more than four million customers directly or indirectly.
Image: Acquistion of Butagaz still awaits regulatory approvals. Photo: courtesy of Benoît Prieur (Agamitsudo) / Wikipedia.
