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Highlights
- Wesfarmers (WES) announces Coregas sale to Nippon Sanso.
- Deal estimated to generate significant pre-tax profit.
- Strategic divestment aligns with portfolio management goals.
Wesfarmers (ASX:WES) has revealed plans to divest its Coregas business to Japan’s Nippon Sanso Corporation for an agreed value of $770 million. This strategic move aligns with Wesfarmers' focus on optimizing its portfolio and reinvesting in core business areas. Coregas operates within Wesfarmers’ industrial and safety division and is a prominent supplier of industrial gases in Australia.
The sale, once finalized, is expected to generate a pre-tax profit of approximately $230 million to $260 million. Nippon Sanso, listed on the Tokyo Stock Exchange, is a global leader in the industrial, electronic, and medical gases sector, ranking as the fourth-largest supplier worldwide. The company already has a strong presence in Australia through its subsidiary, Supagas, and this acquisition strengthens its position further in the region.
Coregas, known for its production and distribution of industrial gases, plays a significant role in Australia’s industrial sector. The divestment allows Wesfarmers (WES) to focus on other businesses within its industrial and safety division, which generated earnings of $72 million in FY24, excluding Coregas contributions. The company’s managing director emphasized that this decision underscores the group’s commitment to disciplined portfolio management and shareholder value creation.
This transaction is subject to various regulatory approvals, including clearance from the Australian Competition and Consumer Commission and the Foreign Investment Review Board. Once these approvals are secured, the sale is expected to be finalized, marking a pivotal step in Wesfarmers’ strategic roadmap.
Nippon Sanso's acquisition of Coregas aligns with its global expansion strategy. With extensive expertise in the industrial gas sector, the addition of Coregas complements its existing operations and enhances its footprint in the Australian market.
Wesfarmers has stated its intention to reinvest in its remaining industrial and safety division businesses following the sale. The conglomerate, which owns well-known retail chains such as Bunnings and Officeworks, continues to strengthen its diversified portfolio while maintaining a focus on long-term growth and operational excellence.
This sale reflects Wesfarmers’ strategic adaptability and its ability to align business decisions with evolving market dynamics and shareholder priorities. The deal represents a significant milestone for both Wesfarmers and Nippon Sanso in achieving their respective objectives.
