Investing.com-- Australia's Wesfarmers Ltd (ASX:WES) will sell its industrial gas supply arm Coregas to a unit of Japanese multinational firm Nippon Sanso Corp (TYO:4091) for A$770 million ($480.33 million), the conglomerate said on Friday.
On successful completion of the transaction, Wesfarmers expects to report a pre-tax profit of A$230 million to A$260 million from the sale.
Coregas is part of the Wesfarmers Industrial and Safety division and is one of Australia’s largest manufacturers and suppliers of industrial gases, according to the company.
The business distributes industrial, medical, and specialty gases in cylinders and offers a wide range of bulk gases for medium to large users across Australia and New Zealand.
Wesfarmer shares fell 2.9% to A$71.04, its lowest level since Nov. 29. Australia's broader benchmark index was also down 1% as of 01:13 GMT.
Wesfarmers expects the sale of Coregas to be completed by the mid-calendar year 2025, the company added.
The agreement to sell Coregas delivers value for shareholders and recognizes the strong growth delivered by Coregas in the industrial gases markets across Australia and New Zealand, Wesfarmers Managing Director Rob Scott said.