The company, Idemitsu Kosan Co has a good chance of sidestepping family opposition to a merger of $1.2 billion with Showa Shell Sekiyu. The company was already keen to merge its operations with the smaller Japanese refiner due to shrinking gasoline demand in the country but was in a battle with Idemitsu founding family for more than a year. Idemitsu said on Monday that it would repay the loan of 31.3 percent bought by Showa Shell raised by the share issue. Showa’s share jumped by 7%, while Idemitsu’s share rose 11%.

This merger will lower the stake held by the founding family and make it more realistic, said Nomura analyst Shigeki Matsumoto. Idemitsu will send 48 million new shares, around 30% percent of its shares. The result of the family not participating in the fundraising means, its stake in Idemitsu would be reduced to 26%. After overcoming the founding family opposition, Idemitsu’s CEO who was pushing full-merger was re-elected to the company’s board.

Idemitsu Kosan Co has a chance of sidestepping family opposition to a merger of $1.2 billion with Showa Shell Sekiyu. It was willing to merge its operations with smaller Japanese refiner, due to a decrease in gasoline demand. But, it was in a fight with founding family since last year. Idemitsu will repay a loan of 31.3 % bought by Showa Shell raised by the share issue. This will lower the stake held by the founding family. The result of the family not participating in the fundraising means, its stake in Idemitsu would be reduced to 26%. The Idemitsu’s CEO might be re-elected to the company’s board.