DCC acquires liquified gas business in Norway and Sweden
DCC HAS significantly increased its presence in Scandinavia with the acquisition of Statoil’s industrial liquified petroleum gas (lpg) business in Norway and Sweden.
The purchase of the business for an undisclosed sum is subject to competition clearance in Norway and Sweden.
The business being acquired has net assets of around €11 million, and sells roughly 260,000 tonnes of fuel annually, equivalent to around 500 million litres or €200 million in revenue.
The acquisition is “an important step in DCC Energy’s planned expansion of its LKPG business beyond Britain and Ireland”, chief executive Tommy Breen said yesterday.
DCC already has an oil distribution business in Denmark and Sweden, and is the number one distributor in Sweden, with about 17 per cent market share.
The Scandinavian business being acquired is reported to be the leading distributor to industrial and commercial customers in the two countries, with a 40 per cent share of the business.
The newly-acquired business is expected to be renamed as Flogas following completion of the sale, which is expected to be completed in late 2012/early 2013.
Separately, the UK Competition Commission yesterday 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.
Yesterday’s announcement comes less than a month after DCC announced it was buying oil giant BP’s liquified natural gas (lpg) distribution business in Britain in a €50 million deal.
The BP unit had net tangible operating assets of €38 million on December 31st, its last balance sheet date. The company distributes 87,000 tonnes of lpg, either in bulk or cylinders, to industrial, commercial and domestic customers in Britain.
These two recent acquisitions will feed into DCC Energy, the largest of the group’s five businesses. It accounted for €7.8 billion of its €10.7 billion revenues in its last financial year, which ended on March 31st.
DCC Energy’s operating profits fell 39 per cent to €85.5 million during the year. The fall in profitability was down to a combination of high oil prices and a mild winter in its main markets, Ireland and Britain, which in turn hit demand for its products.
DCC finished up nearly 1 per cent higher in Dublin yesterday at €21.15.