Energean Oil and Gas Plc. agreed to buy the oil and gas business of Electricite de France SA’s Italian unit for as much as $850 million, a deal that will substantially broaden the Greek energy company’s geographic footprint.
Energean will pay $750 million upfront for operational assets in Egypt, Italy, Algeria, the North Sea and Croatia, according to a statement on the Tel Aviv Stock Exchange, one of two bourses where its stock trades. It’s Energean’s first major acquisition since listing in London last year, and will significantly expand its production and revenue streams.
The Greek company is also acquiring assets under development in Egypt, Italy and Norway. It may pay an additional $100 million following first gas from the Cassiopea development off Italy.
Bloomberg reported last month that Energean was bidding for the oil and gas business of EDF unit Edison SpA, whose assets had earlier attracted interest from Neptune Energy and Warburg Pincus’s Apex International Energy.
EDF was seeking as much as $2 billion for the assets, people with knowledge of the matter said in January.
Energean is currently focused on fields in Israel and Greece, and the acquisition is a costly move for a firm of its size. It plans to finance the transaction by selling $265 million of new shares and using a $600 million bridge loan.
Edison will be entitled to royalties associated with further potential developments in Egypt that would bring the aggregate value close to $1 billion, it said Thursday in a separate statement. The transaction also includes the transfer of all of Edison’s future decommissioning obligations.
Edison will use the proceeds to make “significant investments” in Italy to bolster its renewable energy portfolio, retail activities and energy-efficiency services. It expects the deal to close by the end of the year, and sees a writedown of €400 million ($451 million) to €500 million following the transaction.
Parent company EDF has a programme to sell as much as €3 billion of assets this year and next, following €10 billion of divestments in the previous four years. Earlier this year, EDF sold its 25% stake in Swiss power producer Alpiq for about 489 million Swiss francs ($496 million).
Source: Mint