Japan’s second largest refiner TonenGeneral Sekiyu KK (5012.T) said on Sunday it will buy 99 percent of the shares in ExxonMobil’s (XOM.N) Japanese unit, ExxonMobil Yugen Kaisha, for 302 billion yen ($3.94 billion) to improve efficiency.

ExxonMobil will give up its controlling stake in TonenGeneral, but retain a 22 percent voting share in the Japanese oil giant, completing the transaction by June 1, 2012, a statement said.

ExxonMobil currently holds about 50 percent of the Japanese refiner.

TonenGeneral said it has no plans to change a 38 yen per share dividend forecast for 2011 and expects to maintain the same dividend in 2012.

The deal marks a de facto retreat from the world’s third-largest economy by ExxonMobil, which is focusing its resources on emerging markets and the development of natural resources.

The move could also spark realignment among Japan’s oil refiners, which have been cutting capacity to cope with falling demand caused by a weak economy and a shift to more efficient and environmentally friendly forms of energy, analysts have said.

“Oil demand in Japan has declined in recent years and the domestic operating environment has been characterized by continuous pressure on both margins and volumes,” TonenGeneral said.

The deal is aimed at enabling the group to cope with the challenging environment more effectively, it said.

Reuters reported on Saturday that ExxonMobil was in talks to sell most of its stake back to TonenGeneral.

TonenGeneral, which imports and distributes ExxonMobil oil in Japan, ranks as the country’s No. 2 refiner behind JX Holdings (5020.T). Smaller rivals include Idemitsu Kosan Co (5019.T), Cosmo Oil (5007.T) and Showa Shell (5002.T).

TonenGeneral will seek funds from Sumitomo Mitsui Banking Corp, Sumitomo Trust Banking, Bank of Tokyo Mitsubishi UFJ and Mitsubishi Trust Bank to buy back the stake, industry sources told Reuters.

($1 = 76.7350 Japanese yen)

Source: Reuters