TOKYO, Nov 16 (Reuters) - Japan’s largest oil refiner JX holdings Inc is in talks to merge with TonenGeneral Sekiyu, the Nikkei reported on Monday, potentially creating a company that will control more than half of a market in long-term decline.
Should the talks be successful, the deal will be the biggest merger in the troubled refining industry since JX itself was created from other companies in 2010 and comes after two other refiners are combining their operations.
JX and TonenGeneral aim to complete talks on a broad outline for a merger as early as the end of the year, the Nikkei reported, without citing sources.
Asked whether JX is in talks with TonenGeneral as reported in the Nikkei, JX spokeswoman Hiroko Kuki said: “Nothing has been decided.”
“We are always considering various management options under the tough business environment,” she added.
A statement from TonenGeneral said the company was considering “various options” including tie-ups but had nothing to announce.
Both companies shares were suspended from trading on the Tokyo Stock Exchange.
Japan’s Idemitsu Kosan Co agreed last week to take over smaller refiner Showa Shell Sekiyu in a deal worth about $4 billion that will create Japan’s second-biggest refiner by capacity.
The refiners are finalising the terms of the deal and expect the combined company to start operating between October next year and April 2017, they said in a statement. (Reporting by Aaron Sheldrick and Yuka Obayashi; Editing by Miral Fahmy)