DAVAO-BASED independent oil company Phoenix Petroleum Philippines, Inc. (Phoenix Petroleum) announced on Thursday it is acquiring the liquefied petroleum gas (LPG) businesses of Petronas Dagangan Bhd (PDB) in the Philippines for a total purchase price of $126.1 million (P6.39 billion).
Phoenix said it is acquiring 100 percent of the shares owned by PDB unit PDB (Netherlands) B.V. (PDBN) in Petronas Energy Philippines, Inc. (PEPI) and 100 percent interest in Duta, Inc. (Duta).
PEPI is engaged in the business of selling LPG in cylinders for household and commercial use as well as LPG in bulk for industrial use, and autogas, an environmentally-friendly alternative fuel for vehicles. Duta is primarily engaged in the business of buying, investing, exchanging, selling securities of every kind and description, and leasing land.
In a disclosure to the local bourse, Phoenix Petroleum said that the total purchase price of $126.1 million will be satisfied entirely via cash for both PEPI and Duta.
The energy company said that it views the LPG business as a strong strategic fit as it broadens its product portfolio and petroleum presence across the country, with cross selling opportunities in fuel and LPG to consumers and corporates.
Completion of the transaction is subject to the approval of the Philippine Competition Commission (PCC)
Payment for the acquisitions will be made in two transactions: Phoenix Petroleum will deposit $24 million within three business days after the execution of the Share Purchase Agreements (SPAs). The balance of $96.1 million will be paid in full upon completion and after approval of the PCC is obtained.
With the foray into the LPG space, Phoenix aims to build significant presence in the non-fuel petroleum markets which currently account for about one percent of the company’s business.
PEPI generates most of its sales in the Visayas and Mindanao – underpenetrated regions, with increasing disposable incomes and attractive demand prospects. This will allow Phoenix to further grow this business in its home market, where there is room for profitable industry expansion and less competition compared to Luzon.
Phoenix Petroleum is the leading independent oil company in the Philippines, engaged in the trading and marketing of refined petroleum products and lubricants, operation of oil depots and storage facilities, hauling and into-plane services.