OREANDA-NEWS. Cosmo Oil Company, Limited, Showa Shell Sekiyu K.K., Sumitomo Corporation, and TonenGeneral Sekiyu K.K. began discussions in December 2013 on integrating their LP gas import and wholesale operations, and Cosmo are pleased to inform you that these four companies today concluded an integration agreement to establish an integrated import and wholesale company on April 1, 2015. This integration is contingent on approval from the relevant authorities.

The LP gas import and wholesale operations (LP gas import/procurement, shipping terminal operation, logistics, and domestic wholesaling) and overseas trading operations of the four corporate groups will be consolidated into an integrated structure to create one of Japan's top-class LP gas import and wholesale companies.

To achieve that aim, the four corporate groups will strive to:
(1) Ensure reliable LP gas supply in Japan and strengthen partnerships with specified agents
(2) Improve logistics efficiency and cut redundant costs
(3) Enhance operational efficiency and diversify sales channels
(4) Diversify procurement sources/methods and reduce procurement costs, and actively develop overseas trading on a global scale to ensure the new company is competitive

2.Business integration method
(1) Scope of integration
* The LP gas import and wholesale operations of Cosmo, Showa Shell and TonenGeneral
* The LP gas wholesaling operations of Enessance Holdings Co., Ltd. (established in 2008 by Showa Shell and Sumitomo Corporation with equity stakes of 51% and 49%, respectively)
* The LP gas trading operations of Sumitomo Corporation
(2) Integration method

The four corporate groups will carry out absorption-type spin-offs of their LP gas import and wholesale operations and integrate these operations, with Cosmo Petroleum Gas Co., Ltd. (a wholly-owned subsidiary of Cosmo) as the receiving company. Cosmo, Showa Shell, Sumitomo Corporation, and TonenGeneral will each acquire a 25% stake in the integrated import and wholesale company. The new company's trade name is due to be changed in conjunction with the effective integration date of April 1, 2015.