Australian conglomerate Wesfarmers has agreed to sell its Coregas business to a subsidiary of Japan’s Nippon Sanso Holdings Corporation (NSHD) for A$770 million.
Wesfarmers said it expected to report a pre-tax profit of $230 million to $260 million, subject to completion adjustments, on successful completion of the sale.
Wesfarmers Managing Director Rob Scott said the sale recognised the strong growth delivered by Coregas in industrial gases markets across Australia and New Zealand.
“We believe the divestment is in the best interests of Wesfarmers shareholders and is consistent with our disciplined focus on portfolio management,” Scott said in a statement.
“The sale gives customers and team members of Coregas the opportunity to join an established business in NSHD, which has global expertise owning and operating successful industrial gas businesses.”
Scott said the remaining businesses in Wesfarmers’ Industrial and Safety division would continue to execute their strategies to create shareholder value.
Excluding Coregas, the remaining businesses generated earnings before tax of $72 million in the 2024 financial year.
Wesfarmers is the parent company of retail brands such as Bunnings Warehouse, Coles, Kmart and Target Australia but also has industrials and resources and mining divisions that include Coregas.
Nippon Sanso Holdings Corporation (TYO: 4091) is the world’s fourth largest supplier of industrial, electronic and medical gases and operates in more than 30 countries, including Australia where it has a subsidiary, Supagas Pty Limited.
At the time of writing, Wesfarmers (ASX: WES) shares were trading at $71.07, down $2.129 (2.9%) after trading between $71.00 and $72.53 and capitalising the company at $83.1 billion.