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April 5, 2019

Volume 7 Issue 3

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Idemitsu, Showa Shell Complete Merger

Japan’s Idemitsu Kosan Co. and Showa Shell Sekiyu K.K. merged on Monday, becoming the second-largest lubricant supplier in Japan.

The new company is called Idemitsu Kosan Co., but business will be conducted under the trade name of Idemitsu Showa Shell. Total sales including other oil and petroleum business is about ¥5.8 trillion (U.S. $52 billion), and the company has 130,000 employees.

Idemitsu Kosan HQ signage

Photo: Aflo Co. Ltd./Alamy

Signage by the entrance to Idemitsu Kosan headquarters in Tokyo, Japan. The company and Showa Shell Sekiyu K.K. merged on Monday, becoming the second-largest lubricant supplier in Japan.

There will be no change in the names of either company’s existing lubricant brands. The new company will continue to market Idemitsu Kosan's Apollo brand of automotive lubricants and the Daphne brand for industrial and marine lubricants, and Showa Shell’s Helix brand for automotive lubricants.

"The managerial environment of the Japanese petroleum industry has been getting tougher, with the declining demand of petroleum products over the medium to long term, along with worsening climate change,” President and Representative Director Shunichi Kito said in a message on the new company website. “In such circumstances, Idemitsu Kosan and Showa Shell Sekiyu K.K. completed the business integration with the ambition of creating one of the most competitive leading companies by uniting our respective strengths and management resources.”

Merger negotiations began in January 2015, but a four-year delay ensued due to the Idemitsu founding family’s opposition held up the deal. The new company, together with the country's largest lubricant supplier JXTG, will have a combined 89 percent of the Japanese lubricant market, according to global consultancy firm, Kline & Co.

Idemitsu Kosan has a 305,000 metric tons per year base oil plant in Chiba. Showa Shell has a 290,000 t/y base oil plant in Yokkaichi.