Japan's Inpex to buy Teikoku Oil: Report

Inpex Corp., Japan's largest oil explorer, will buy smaller competitor Teikoku Oil Co. in an all- share deal to expand its oil and gas business and bolster competitiveness, Bloomberg reported.

?We need to be more competitive to expand our businesses and to do so, in the intensified competition in international markets, we decided to merge,? the companies said in a faxed statement on Saturday.

The Tokyo-based companies will set up a joint venture, Inpex Holdings Inc., on April 3, they said in the statement. Teikoku has a market value of 359 billion yen (US$3 billion) based on Friday's closing share price.

Shares in the holding company will be issued on May 26. Inpex and Teikoku Oil will delist the shares March 28, 2006.

Inpex and Teikoku Oil will hold a joint news conference at 2 p.m. in Tokyo Saturday.

J.P. Morgan Chase & Co. advised Inpex and Teikoku Oil was advised by Goldman Sachs, the statement said.

Inpex, which listed shares on the Tokyo Stock Exchange last November, was set up by the Japanese government in 1966 to explore and develop oil and natural gas fields in Indonesia.

The merger will give Inpex access to Teikoku Oil's overseas fields, including those in Ecuador and rights to drill in the East China Sea. Inpex pumps oil and gas at projects in the south-west Caspian Sea, off the coast of Australia and in Indonesia. (*)