Shell has agreed to sell Butagaz, its French liquefied petroleum gas (LPG) business, in a €464mln (£338mln) deal with Irish group DCC (LON:DCC).
Shares in DCC, which is a FTSE 250 constituent, gained around 10% on Tuesday morning as investors welcomed the significant expansion.
With the addition of Butagaz, a market leading distributor with over four million customers, sees DCC’s business become Europe’s third largest LGP operation.
To pay for the acquisition DCC has launched a share placing, which will be organised by brokers JP Morgan Cazenove and Davy.
DCC told investors the transaction was significantly earnings accretive and said it expects a return on capital to be substantially above its cost of capital.
"The acquisition of Butagaz represents a major step forward in DCC's ambition to build a very significant presence in the global LPG market,” said Tommy Breen, DCC’s chief executive.