As demand for LP gas distributors continues to shrink, M&A activity is increasing in the LP gas industry. This article presents the 2018–2021 cases and typical sale prices, while organizing industry trends and representative M&A cases on a fact-based basis.
Demand in the LP gas industry is trending downward due to Japan’s declining birthrate and aging population, as well as the spread of city gas and electrification. Distributors are dispersed across regions, and many are small or midsized. Many operators run LP gas sales alongside other businesses, while dedicated retail operators account for the majority.
Although systems have been introduced to strengthen safety obligations in the LP gas retail business, the adoption of centralized monitoring systems and certification as an accredited distributor have been identified as challenges in upgrading operations. Efforts to diversify energy offerings and enhance services are expected to advance as companies seek to offset declining demand.
M&A among LP gas distributors is becoming more active. Cases include Iwatani Corporation’s acquisition of Tokyo Gas Energy as a wholly owned subsidiary, as well as Misumi, Taiyo Propane, JA Group-affiliated companies and TOKAI HD. Partnerships with companies in other industries are also progressing, including combinations with electric power businesses.
Typical sale prices for LP gas distributors and customer-account transfers are said to be around ¥70,000–¥200,000 per meter. Factors affecting the price include the status of assets and liabilities, the customer base and future prospects.