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DCC buys Shell's LPG unit in Hong Kong and Macau; CEO steps down

Published: 17:29 05 Apr 2017 AEST

Shell
Shell has offloaded more assets as part of its disposal plan to cut debt

Royal Dutch Shell plc (LON:RDSB) has sold its liquefied petroleum gas (LPG) business in Hong Kong and Macau to DCC Plc (LON:DCC) for HK$1.165bn (£120mln).

DCC - a sales, marketing and distribution specialist operating in energy, health, technology and environmental sectors – said its acquisition is expected to deliver an annual operating profit of HK$145mln.

The business supplied about 74,000 tonnes of LPG in the year ended 31 December.

Shell’s decision to sell the unit is part of a US$30bn asset disposal programme to help reduce debt following its US$54bn acquisition of BG Group plc (LON:BG. last year.

The disposal is expected to be completed before the end of March 2018, subject to regulatory and operating licence approvals.

DCC said the business will continue to operate under the Shell brand in Hong Kong and Macau, based on a long-term brand licence agreement.

“The acquisition represents a further strengthening of our relationship with Shell and gives us a strong market position in Hong Kong and Macau,” said chief executive Tommy Breen.

“It is also DCC's first material step in building its business outside of Europe and gives DCC a platform for development in the growing LPG market in Asia."

DCC's chief executive steps down...

DCC announced the deal alongside its trading update for the year to 31 March 2017. During the period, DCC committed more than £550mln to acquisition expenditure across its energy, healthcare and technology divisions.  

The group also announced its chief executive Tommy Breen will step down after almost nine years in the position. Breen will be replaced by Donal Murphy, the managing director of DCC Energy.

DCC reiterated its guidance for full year operating profit and adjusted earnings per share to be “significantly ahead” of the prior year and in line with current market consensus.

Shares rose 1.99% to 7,155p in morning trading.

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