The holding conglomerate owned by tycoon Lucio Co has expanded into the liquefied petroleum gas (LPG) business after striking a deal to buy out LPG market leader Liquigaz Philippines Inc.
In a filing with the Philippine Stock Exchange on Tuesday, Cosco Capital Inc. said it will acquire 90 percent of the capital stock of Liquigaz, the largest supplier of LPG in the country.
Cosco Capital is the consumer focused holding company of Lucio Co. It counts
supermarket chain Puregold Price Club Inc., leading wine and spirits distributorship, real estate assets, and an oil storage facility in its portfolio of business.
Under the deal yet to be finalized, Cosco Capital will assume control of the LPG provider, while minority partner PR Gaz Inc. will retain a 10-percent stake.
Outside of the Cosco Capital group, PR Gaz is also owned by Lucio Co as a separate entity.
When asked about the purchase cost, Cosco Capital president Leonardo Dayao said in a text message that the “final figure is still subject to adjustments after completion of the diligence.”
“We are guided by the price earning multiple we used in previous acquisitions,” he added.
Liquigaz is engaged in the retail sale of LPG and other fuel products, which account for about 30 percent of the market.
It is said to be the biggest seller of LPG in Luzon, having storage facilities that account for more than 60 percent of the country’s total LPG imports. Liquigaz has a 12,500-metric ton capacity storage tank in Mariveles, Bataan, which is the largest of such facility in the Philippines.
“The acquisition will mark Cosco’s entry into the LPG business with a strong initial presence in the upstream business,” Dayao said.