DCC shares spike after it announces a new energy acquisition with ExxonMobil’s Norwegian unit
Shares in DCC have surged after the company's energy arm said it will buy the retail petrol station network of ExxonMobil's Norwegian unit, Esso Norge, for 2.43bn Norwegian krone (£235m).
The company rose to the top of the FTSE 100 index this morning, and its shares were up 6.67 per cent at 6,800p in early trading.
Dublin-based DCC, which works in oil distribution as well as waste management and healthcare, said the total consideration along with the value of stock in tank at the date of its takeover, would be paid in cash.
The company has worked to expand into western Europe in recent years through acquisitions of assets from oil companies, including Shell's French gas business. The acquisitions helped the support services company deliver a "record" year in its latest annual trading update, and today it said it is on track to meet higher profit forecasts.
Esso's retail petrol station network is the third-largest in Norway with around 20 per cent of retail volumes. It has 142 company-operated sites and contracts to supply 108 Esso-branded dealer-owned stations, DCC said.
DCC said it will also enter into long-term brand and supply agreements with Esso Norge.
Morgan Stanley analysts said the "meaningful" purchase will deliver an expected return on acquisition capital of nearly 15 per cent in the first full year of ownership.
Analysts from Davy said DCC Energy, which now has a retail network of 980 stations across six countries, is expected to continue its drive to acquire retail assets from major oil firms in Europe.
The transaction is expected to close in the final calendar quarter of 2017, the company said.