DCC shares surge 10% after €464m offer for Shell's LPG business in France

Ireland's DCC Energy has made a binding offer to acquire Royal Dutch Shell's Butagaz Liquefied Petroleum Gas (LPG) business in France for €464m (£337m, $529m).

Shares in DCC, the owner of DCC Energy, are trading up 9.98% at £48.28 as at 9.55am BST. Meanwhile, shares in Shell are trading down 0.15%.

"In reply to this offer, DCC Energy has been granted exclusivity while Shell consults with the staff councils of both Butagaz and Shell France," Shell said in a statement.

Shell noted that the transaction is also subject to obtaining regulatory approvals following these consultations. The deal is expected to be settled in 2015.

The company added that its other French businesses, including aviation, commercial fleet, lubricants, and retail and specialties will continue to operate as before.

"The transaction is consistent with Shell's strategy to concentrate its Downstream footprint on a smaller number of assets and markets where it can be most competitive, and is part of an on-going exit from the LPG business globally," Shell said.

The Anglo-Dutch oil major has been working hard to sell its European LPG operations, and had reportedly appointed Credit Suisse to advise on an auction.

The deal comes as the company was able to agree on the assets' price, given the improved deal-making environment in Europe.

Shell has already disposed a number of downstream assets, including some of its Norwegian and British retail businesses, and refineries in Britain, Germany, France, Norway and the Czech Republic.

Earlier, Shell announced the £47bn purchase of British oil and gas giant BG Group, in one of the biggest deals in the energy sector.

DCC said the proposed deal would be its largest acquisition and would make it Europe's third-largest LPG distributor. The acquisition would significantly increase the scale of DCC's LPG business from approximately 700,000 tonnes to 1.2 million tonnes, the company said.

"The acquisition of Butagaz represents a major step forward in DCC's ambition to build a very significant presence in the global LPG market. As the leading LPG brand in France with a strong heritage and reputation for customer service, Butagaz is an excellent strategic fit for DCC Energy's existing LPG business," Tommy Breen, chief executive of DCC, said in a statement.