Philippine refiner Petron Thursday said its board has approved the company's investment in ExxonMobil's downstream business in Malaysia.
ExxonMobil in August announced that it was selling assets in its downstream Malaysia portfolio -- including a 65% stake in the operator of the 88,000 b/d Port Dickson refinery and 560 branded retail stations -- to Philippines-based food and beverage company San Miguel Corp., in a transaction valued at $610 million.
SMC owns 65% of Petron, the largest refining and marketing company in its home country of the Philippines.
The transaction covers the acquisition of a 65% stake in Esso Malaysia Berhad, the refinery operator, for a cash consideration of $206 million. Under Malaysian law, once it acquires the stake, SMC would be required to make a mandatory takeover offer for the outstanding 35% of EMB.
As part of the deal, SMC will also acquire 100% of the US major's retail affiliates ExxonMobil Malaysia and ExxonMobil Borneo for a total consideration of $493 million.
The assets include equity interests in 10 terminals, seven of which are active, and 560 retail sites, including 420 that are company owned, according to a statement from ExxonMobil.
SMC had earlier said that it would look to upgrade the Port Dickson refinery so that it can use a wider variety of crudes, and produce higher-value products.
The deal is expected to be concluded in the first half of 2012.
Petron has 180,000 b/d of refining capacity and owns more than 1,700 service stations in the Philippines.
