Nippon Mitsubishi Oil Corp.'s oil refining unit Tohoku Oil Co. will become a wholly owned subsidiary on Oct. 1 through an equity swap, the two companies said Thursday.
The nation's largest oil distributor will also consider integrating the group's oil refining operations next April 1, they added.
The move is aimed at boosting the Nippon Mitsubishi group's competitiveness in the oil refining business, while helping to ensure an efficient and stable supply of petroleum products, the companies said.
Under the plan, Nippon Mitsubishi, which holds a 58.2 percent stake in Tohoku Oil, will float 14.42 million new shares, exchanging them for all of Tohoku Oil's remaining shares.
One Tohoku Oil share, which has a face value is 500 yen, will be exchanged for 2.3 Nippon Mitsubishi shares, which have a face value of 50 yen, they said.