DCC Energy agrees to acquire Butagaz, a leading LPG business in France, for €464 million (£338 million)

CC plc announces that DCC Energy has made a binding offer to acquire Butagaz, a LPG business in France, from Shell for €464 million (£338 million).

Shell has granted DCC exclusivity while it consults with its French Works Councils as required by French law. DCC’s LPG operations are managed by the Flogas Group who is WLPGA Industry Council member.

This transaction would represent the largest ever acquisition by DCC and a major step forward in the continuing expansion of its LPG business. The French LPG market is the second largest in Western Europe and approximately twice the size of the market in Britain. The acquisition of Butagaz would provide DCC Energy with a substantial presence in the French LPG market, an experienced management team and a high quality sales, marketing and operating infrastructure.

Key Transaction Features:

• Butagaz has a market share of 25% and the “Butagaz” brand is the leading LPG brand in France.
• Butagaz is market leader in the LPG cylinder and small bulk market segments and sells directly or indirectly to over four million customers.
• The acquisition would significantly increase the scale of DCC’s LPG business from approximately 700,000 tonnes to 1.2 million tonnes.

Based on the results of Butagaz for its most recent financial year ended 31 December 2014 Tommy Breen, Chief Executive of DCC plc, said: “The acquisition of Butagaz represents a major step forward in DCC’s ambition to build a very significant presence in the global LPG market. As the leading LPG brand in France with a strong heritage and reputation for customer service, Butagaz is an excellent strategic fit for DCC Energy’s existing LPG business. We very much look forward to welcoming the Butagaz management and employees into the DCC Group. DCC and Butagaz share similar ambitions and together we are excited by the opportunity to grow and develop the Butagaz business and brand.”

The acquisition of Butagaz would be DCC Energy’s second acquisition in France following its previously announced agreement to acquire the Esso Retail business of Esso branded unmanned retail petrol stations and motorway concessions from Esso S.A.F. The Esso Retail acquisition is expected to be completed before the end of June 2015 as all legal and competition clearances have now been received.

J.P. Morgan Limited (which conducts its UK investment banking business as “J.P. Morgan Cazenove”), which is authorised and regulated by the Financial Conduct Authority, is acting as financial adviser to DCC and no one else in connection with the transaction described herein and will not be responsible to anyone other than DCC for providing the protections afforded to its clients or for providing advice in connection with the transaction or in relation to the contents of this announcement or any other matters referred to herein.

About DCC Energy and DCC plc

DCC Energy’s LPG operations are managed by the Flogas Group who are Council members of the WLPGA, and has for many years been the second largest LPG business in Britain and Ireland. A key component of DCC Energy’s strategy has been to continue growing its LPG business into new geographic markets. In recent years DCC Energy has acquired LPG businesses formerly owned by oil majors in Norway and Sweden, where it is the market leader (now operating under the Flogas brand) and in the Netherlands, where it is the joint market leader operating under the Benegas brand.

DCC plc is an international sales, marketing, distribution and business support services group headquartered in Dublin with operations in Britain, Continental Europe and Ireland. DCC has four divisions - DCC Energy, DCC Technology, DCC Healthcare and DCC Environmental. In its financial year ended 31 March 2015, DCC generated revenue of £10.6 billion and operating profit of £228 million and currently employs approximately 10,200 people in 14 countries. DCC's shares are listed on the London Stock Exchange and are included in the FTSE All-Share Index and the FTSE 250 Index under Support Services. DCC Energy, DCC’s largest division, is the leading oil and LPG sales, marketing and distribution business in Europe. The marketing and selling of LPG is an important part of DCC Energy’s activities which also include the marketing and selling of oil products and fuel cards and the supply to, and ownership of, retail petrol stations.

About Butagaz

Founded in 1931, Butagaz is a leading distributor of LPG in France with a 25% market share, selling to domestic, commercial, agricultural and industrial customers. The business is headquartered in Levallois in Western Paris and employs approximately 550 employees across France. Butagaz is the leading LPG brand in France with very high levels of consumer brand recognition. Butagaz has a strong supply base, sourcing LPG from a number of supply points in France and also from Belgium, Spain and Germany. Butagaz transports product by road, rail, sea and pipeline to a well-invested network of ten bulk depots and seven filling plants across France and one filling plant in Corsica. The business sells to circa 210,000 small and large bulk customers, while cylinders are stocked at 46 depots nationally and are distributed to some 26,000 retail points of sale, including hypermarkets and independent retailers, which in turn sell to approximately four million end-users.