ExxonMobil Sells Japanese Arm

A motorist fuels his car at a Mobil station in Chicago in this file photo from 2009. ExxonMobil has divested its Japanese business to its local partner on Sunday for $3.9 billion. (Scott Olson/Getty Images)

NEW YORK—Oil giant ExxonMobil Corp. sold its Japanese subsidiary on Sunday, for 300 billion yen ($3.9 billion), after restructuring its business on the island nation and the world’s No. 3 economy.

Exxon, in the deal, will sell its majority stake in local refiner TonenGeneral Sekiyu KK and raise $3.9 billion. After the deal Exxon will retain a minority stake in TonenGeneral and give it a license to use Exxon’s brands in the Japanese market.

“Exxon Mobil has continuously adapted its business model to meet the needs of Japanese society and its changing business environment,” the company said in a statement Sunday. The sale is part of Exxon’s restructuring of its Japanese business.

The deal comes after the Japanese government’s 2010 decision to force oil refineries to modernize or face production cuts. The decision will also allow Exxon to exit the lower-margin refining business and focus its resources on more lucrative oil pumping and sales.

According to a MarketWatch commentary, Japanese refineries pumped up volume following the March 2011 tsunami, but the global economic recession and lower domestic demand in Japan have left many refineries with excess capacity concerns. This industry environment has left refineries with little choice but to consolidate.

TonenGeneral said the deal will not affect its planned dividend in 2012. ExxonMobil, the world’s largest company by market capitalization, is based in Irving, Texas.