Japan's Nippon Oil to buy rival Kyushu Oil-paper

TOKYO, March 18 (Reuters) - Japan's largest refiner Nippon Oil Corp (5001.T) plans to acquire rival Kyushu Oil Co around October as part of efforts to survive in an industry hit by surging crude oil prices and a shrinking market, the Nikkei business daily reported on Tuesday.

Kyushu Oil, ranked seventh in sales, is 36 percent owned by Nippon Steel Corp (5401.T), and Nippon Oil, which has a 10 percent stake in the refinery, is in talks with Nippon Steel and other shareholders such as Marubeni Corp (8002.T) to acquire a 100 percent stake via an equity swap, the Nikkei said.

By acquiring Kyushu Oil, Nippon Oil's share of domestic gasoline sales would rise to nearly 30 percent from 25 percent, putting it further ahead of Exxon Moible Corp's 19 percent and Showa Shell Sekiyu KK's (5002.T) 16 percent, the Nikkei said. (Reporting by Taiga Uranaka, Editing by Michael Watson)