By Alex Sebastian For This Is Money: 10:59, 5 April 2017
Royal Dutch Shell has announced a deal to sell its liquefied petroleum gas business in Hong Kong and Macau to DCC Energy for $150.3million as it continues its $30billion asset sales programme.
The Anglo-Dutch oil major has been active in the two locations for close to 60 years and supplies services which help meet the needs of over 100,000 households. The business will continue to operate under the Shell brand.
Shares in Shell responded positively to the news, climbing 1.3 per cent to 2,127p Wednesday.
It provides LPG in bulk, cylinder and autogas formats to domestic, commercial and industrial customers.
In Hong Kong specifically, the business supplies piped LPG to many of the large apartment complexes which are common in the territory.
DCC, a marketing and business support services group, said it expects the acquired units to add annual operating profit of around £15million.
The acquisition is expected to complete before the end of DCC’s financial year on 31 March 2018.
Shell downstream director John Abbott said: ‘This sale supports Shell’s strategic commitment to focus downstream activities on areas where we can be most competitive.’
‘This is one of the last of our wholly owned liquefied petroleum gas businesses and this sale is another step in Shell’s ongoing portfolio optimisation strategy to deliver 30 billion of divestments between 2016 and 2018,’ he added.