ONGC upstages China's Sinopec to acquire Imperial Energy for £1.4 billion
India's largest oil producer and exploration company, the state-run Oil and Natural Gas Corporation Ltd (ONGC) said its wholly owned subsidiary ONGC Videsh Ltd (OVL) has agreed to acquire the entire stake of Russia-focused Imperial Energy for £1.4 billion ($2.6 billion) in an all-cash deal, a move that will ensure future energy supplies of India.
According to a company statement, ONGC's overseas investment arm, OVL, and the UK-based Imperial Energy Corporation Plc. have reached an agreement on the terms of recommended pre-conditional cash offers for the entire issued and to be issued ordinary share capital of Imperial Energy, and for Imperial Energy's outstanding convertible bonds.
As per the terms and conditions of the deal, Imperial Energy shareholders will receive £12.50 in cash for each Imperial Energy share held. Imperial founder Peter Levine, who holds 6 percent stake, is expected to net about £90 million from the sale.
The acquisition will be made by Cyprus-based Bidco, a wholly owned subsidiary of OVL, formed for the purpose of making the offers.
Listed on the London Stock Exchange (LSE), Imperial Energy is an independent upstream oil exploration and production company having oil production blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan.
The deal is subject to regulatory and shareholders approvals, ONGC said.
"Imperial Energy's Directors are pleased to have been able to reach agreement with OVL and intend unanimously to recommend shareholders accept the proposed offer," Peter Levine, chairman, Imperial Energy, said.
"Imperial Energy has grown significantly from a pure exploration company and as Imperial Energy moves into the next phase of its development, with production increasing further over the coming years, it makes strategic sense to be part of a larger group (ONGC). The Share Offer fairly reflects Imperial Energy's achievements and represents an excellent opportunity to realize a compelling value in cash," he said.
"The acquisition represents an important addition to OVL's operations and we believe OVL's financial strength and technical expertise will further enhance the attractive growth potential of the business in the Tomsk region," R.S. Butola, managing director, OVL, said.
"Additionally, we view this as an important opportunity to expand on the continuing co-operation between Russia and India in the energy sector," he said.
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