Deal worth HK$1.65 billion expected to be completed before DCC's financial year ending 31 March 2018
Leading international sales, marketing and business support services group, DCC plc, has announced that DCC Energy has reached agreement with Shell Gas (LPG) Holdings BV to acquire its liquefied petroleum gas ("LPG") business in Hong Kong and Macau ("Shell HK&M") based on an enterprise value of HK$1.165 billion (c. £120 million).
Tommy Breen, Chief Executive of DCC plc, said "The acquisition of Shell's LPG business in Hong Kong and Macau is an exciting development for DCC and is consistent with our ambition to build a substantial presence in the global LPG market. The acquisition represents a further strengthening of our relationship with Shell and gives us a strong market position in Hong Kong and Macau. It is also DCC's first material step in building its business outside of Europe and gives DCC a platform for development in the growing LPG market in Asia."
The transaction requires certain regulatory consents and operating license approvals. The business is required to be separated from the broader Shell Hong Kong operations. Before the end of DCC's financial year ending 31 March 2018, the transaction is expected to be completed.
Selling LPG for almost sixty years in Hong Kong and Macau, Shell HK&M is one of the leading LPG sales and marketing businesses in the region. Domestic, commercial and industrial customers are provided LPG in bulk, cylinder and autogas formats. Shell HK&M supplies piped LPG in Hong Kong, where it is the market leader to very large apartment complexes common in the territory.
The business supplied approximately 74,000 tonnes of LPG in the year ended 31 December 2016. Under DCC's ownership is expected to deliver an annual operating profit of HK$145 million (c. £15 million).
Based on a long term brand license agreement, the business will continue to operate under the Shell brand in both Hong Kong and Macau, subsequent to the completion of the acquisition. PWKD07042017