Exxon Mobil said it is selling a 99 percent stake in its downstream product marketing subsidiary, Exxon Mobil Yugen Kaisha, to Japanese refinery operator TonenGeneral Sekiyu.

The transaction is expected to cost $3.9 billion.

The agreement "will result in a single, integrated downstream business better positioned to meet Japan's energy needs," Exxon Mobil said Sunday in a news release announcing the deal.

Exxon Mobil said it has conducted business in Japan for more than a century.

Under the terms of the agreement, refinery operator TonenGeneral will have exclusive rights to use Exxon Mobil's brands in Japan, continuing to deliver products and services under the Esso, Mobil, and General brands as well as the continued use of Exxon Mobil's technology and technological support relating to oil refining and petrochemicals.

Exxon Mobil will also provide international crude, feedstock and fuels supply services, including international marine coverage services.

TonenGeneral said the agreement will help it boost efficiency and profitability by more closely integrating its marketing and production business divisions as well as pursue business opportunities that will allow it to respond to changing market demands.

In the aftermath of the March 11 earthquake and tsunami and the ensuing Fukushima nuclear power plant disaster, Japan faced its first trade annual deficit in 30 years in 2011.

In November, TonenGeneral said fuel sales volume and crude throughput over the first three quarters had fallen 4.6 percent and 3 percent, respectively, compared to last year, citing a weaker domestic economy and disruption following the March 11 disaster as well as a typhoon in September.

"Through this newly formed integrated production-distribution operation, the company will be able to more effectively execute locally driven investments and other business decisions that will help the company adapt to the challenging operating environment," TonenGeneral stated in a news release.

"Oil demand in Japan has declined in recent years and the domestic operating environment has been characterized by continuous pressure on both margins and volumes," TonenGeneral said.

Over the last 15 years, oil products in Japan have decreased steadily. Data from Japan's Ministry of Economy, Trade and Industry indicate that in the first months of 2011, sales averaged 24.2m kiloliters, which is 27 percent below the monthly average in 1997, when sales peaked.

The deal is expected to close mid-2012, with Exxon Mobil continuing as TonenGeneral's largest shareholder, Exxon Mobil said, and it's also likely to continue serving on TonenGeneral's board of directors.