Wesfarmers (ASX:WES) has agreed to sell its Coregas business to a subsidiary of Nippon Sanso Holdings Corporation (NSHD) for $770m.
Upon completion of the sale, Wesfarmers expects to record a pre-tax profit of $230m to $260m, subject to completion adjustments. The sale remains conditional on receiving approvals from the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
Subject to meeting all conditions, the sale is expected to be completed by mid-2025.
Coregas is part of Wesfarmers' Industrial and Safety division and is one of Australia’s largest manufacturers and suppliers of industrial, medical and specialty gases. The company distributes gases in cylinders and provides bulk gases for medium to large users across Australia and New Zealand.
Nippon Sanso Holdings (NSHD), listed on the Tokyo Stock Exchange, is the fourth-largest supplier of industrial, electronic, and medical gases worldwide, with operations in over 30 countries. In Australia, its wholly owned subsidiary, Supagas Pty Ltd, is a leading supplier of liquefied petroleum gas as well as gases.
Wesfarmers Managing Director Rob Scott commented: "We believe the divestment is in the best interests of Wesfarmers shareholders and is consistent with our disciplined focus on portfolio management."
Wesfarmers' Industrial and Safety division will continue to operate its Blackwoods and Workwear Group businesses. Excluding Coregas, this division recorded $72m in earnings before tax in the 2024 financial year.
Shares in Wesfarmers are trading 2.25% lower at $71.57.
