Japanese liquefied petroleum gas (LPG) vender Tokai Corp. is set to make a foray into the rapidly growing Vietnamese market through the acquisition of a 45 percent stake in each of two subsidiaries of local peer Petro Center Corp.
Tokai, affiliated with Tokai Holdings Corp., said Monday it will buy shares in Mien Trung Gas Joint Stock Co. (MTG) based in the central province of Quang Nam and V-Gas Petroleum Corp. in Dong Nai Province, near Ho Chi Minh City.
After the share purchases, Petro Center and Tokai will hold a 51 percent and 45 percent stake, respectively, in the two companies while the remaining 4 percent each will be owned by other investors. As of the end of 2019, MTG and V-Gas Petroleum were capitalized at 180 billion dong ($7.8 million) and 225 billion dong, respectively.
The deal is part of the Tokai group’s efforts to bolster its revenue base through mergers and acquisitions overseas under its mid-term management plan ending in March 2021. Vietnam is its fourth foreign market, the company said in a statement.
“Vietnam is expected to sustain steady growth against the backdrop of a large workforce and growing investments from overseas,” the statement said. The LPG market “will steadily expand thanks to the country’s economic growth.”
Quang Nam-based Petro Center had also been looking for a business partner that can provide gas supply technology and other expertise with the aim of enhancing its brand power and thereby expanding its service areas, Tokai’s statement said.
Ho Chi Minh-listed Petro Center is currently selling LPG in central and southern Vietnam.
The Tokai group, based in the central Japan city of Shizuoka, set up a subsidiary in China in 2012 and one in Myanmar in 2014. Tokai Communications Corp., a telecommunications subsidiary of Tokai Holdings, also founded a joint venture in Taiwan in 2013.