- MAYUMI NEGISHI
- The Wall Street Journal
- 12:00AM July 1, 2016
The battle for hegemony in the Middle East between Saudi Arabia and Iran threatens to up-end a $US4 billion ($5.4bn) merger in Japan.
The family of the late founder of Idemitsu Kosan is opposing a planned merger between the oil refiner — Japan’s second-largest behind JX — and Showa Shell Sekiyu, its smaller rival. Idemitsu has maintained close ties with Iran since the 1950s while Showa Shell is 15 per cent owned by Saudi Arabia’s state-owned Saudi Arabian Oil Co, known as Aramco.
The Idemitsu family said a merger would be “inappropriate” given the growing tensions between the two countries. The two Persian Gulf nations, which belong to rival sects of Islam, are jockeying for political influence in the region and have recently clashed over the question of a cap on crude output.