DCC has announced a further acquisition in its energy business with agreement to acquire the industrial LPG business of Statoil in Sweden and Norway.
The deal, which is subject to approval on competition grounds, will see the Dublin-listed company become market leader in the region.
Separately, the UK Competition Commission today gave DCC final clearance to go ahead with the purchase of oil distribution assets in Britain previously owned by French group Total.
DCC agreed to buy the assets from Rontec Investments last September in a deal worth €67 million. The assets include a home-heating oil distribution business as well as Total’s service station businesses on the Isle of Man and the Channel Islands. The transaction had been provisionally approved in July.
The Scandinavian business being acquired today is reported to be the leading distributor to industrial and commercial customer sin the two countries, with a 40 per cent share of the business.
Statoil Fuel and Retail LPG has net assets of around €11 million, DCC said this morning in a statement, and it sells roughly 260,000 tonnes of fuel annually, equivalent to around 500 million litres or €200 million in revenue.
Chief executive Tommy Breen said the deal “is an important step in DCC Energy’s planned expansion if its LKPG business beyond Britain and Ireland. . . . Together with our existing oil distribution businesses in Denmark and Sweden, this acquisition significantly increased the scale of DCC Energy’s activities in Scandinavia”.
Goodbody Stockbrokers said this morning that the acquisition will likely add €4 million to group profits on an annualised basis, equating to 3 cent per share.
“This acquisition means that DCC now distributes 1.3 billion litres of fuel in Scandinavia, which represents over €1 billion of sales and clearly positions the group as a market leader in the region,” the broker said in a note to clients.
DCC said in a statement that it hopes to complete the acquisition either later this year or early in 2013 once competition clearance is secured. The company will then be rebranded as Flogas.
