Bangchak finalises Esso Thailand acquisition

The energy conglomerate Bangchak Corporation, listed on the Stock Exchange of Thailand (SET), finalised its acquisition of Esso Thailand shares via a tender offer. The deal, valued at 3.54 billion baht, has resulted in Bangchak owning 76.3% of Esso Thailand.

Previously, Bangchak secured a 65.99% stake in Esso Thailand, the entity managing Esso petrol stations, from Esso Asia Holdings Pte for 22.6 billion baht. The corporation also revealed its plan to purchase the remaining 34.01% stake through a tender offer to investors in the stock market. The offer, set at 9.89 baht per share, ran from early September until October 12.

Phatpuree Chinkulkitnivat, Bangchak’s senior executive vice-president for accounting and finance, stated that Bangchak eventually bought an extra 10.31% share. The tender offer was for a total of 1.177 billion shares, but only 358.4 million could be acquired by the company.

Funds for the tender offer were partly sourced from a loan provided by Bangkok Bank and Bangchak’s cash reserves, aiming to keep the debt-to-equity ratio under 1.1 times.

Bangchak previously declared its expectation to create synergy by merging its operations with Esso Thailand, projecting an additional income of 3 billion baht from the consolidation by 2025. As part of this plan, the company intends to rebrand Esso-owned petrol stations to Bangchak starting in November.

The synergy strategy addresses major factors regarding scale economy, back office operational expenses, and management simplification. This is projected to reduce BCP’s costs by 1.5 billion baht annually, according to Phatpuree.

The company also anticipates additional earnings of 1 billion baht from oil refinery enhancements, the introduction of new oil products, gross refinery margin optimisation, and a coordinated maintenance schedule.

Additionally, 500 million baht is expected to be realised from crude oil co-loading, expanding lower-cost logistics, and increasing the value and volume of oil and non-oil trading.

From September to December, BCP aims to generate 625 million baht through this business synergy, with expectations of further gains next year until it achieves its target of 3 billion baht in 2025.

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