Untitled Document
Untitled Document

Sinopec Group to acquire Addax Petroleum for $7.2B

China's Sinopec International Petroleum Exploration and Production Corp. (SIPC) has agreed to acquire Calgary-based oil and gas exploration company Addax Petroleum Corp. for roughly $7.2 billion. The deal would represent the largest foreign acquisition ever by a Chinese company and reflects China's continued eagerness to obtain access to major energy resources - in this case concentrated in Addax's finds in West Africa and Iraqi Kurdistan.

A final agreement is expected to be filed by next week.

The takeover is expected to significantly increase China’s worldwide oil and gas holdings by giving them a stake in what some are calling one of the new "hot" oil exploration frontiers.

Sinopec intends to acquire all the outstanding common shares of Addax Petroleum by way of a negotiated take-over bid for C$52.80 per common share in cash.

SIPC is a wholly-owned subsidiary of China Petrochemical Corp. (Sinopec Group) and undertakes overseas investments and operations in the upstream oil and gas sector.

The agreement provides for, among other things, customary provisions relating to support of Addax Petroleum's board of directors, non-solicitation and right to match covenants in favor of SIPC and the payment to SIPC of a termination fee of C$300 million if the acquisition is not completed in certain specified circumstances.

SIPC has agreed to pay a break-up fee of C$300 million in the event that all approvals required to be obtained by SIPC from the Government of The People's Republic of China have not been obtained by August 24, 2009 and Addax Petroleum elects to terminate the Support Agreement.

In connection, AOG Holdings BV, a wholly-owned subsidiary of the Addax & Oryx Group Ltd., and Jean Claude Gandur, president and CEO of Addax Petroleum, have each entered into lock-up agreements with SIPC to tender their Addax common shares to the offer. Addax's other senior officers and directors will also enter into lock-up agreements. The total lock-up agreements represent roughly 38% of outstanding Addax Petroleum common shares.

RBC Capital Markets has acted as financial advisor to Addax Petroleum and provided an opinion that the consideration is fair. 

Addax Petroleum's Gandur commented, "We are pleased that Sinopec has recognized the highly attractive asset portfolio and exceptional team that we have assembled at Addax Petroleum. The efforts and accomplishments that Addax Petroleum has achieved thus far will be built on through increased investment in the business and acceleration of development and exploration plans. While Addax Petroleum will cease to be a publicly traded company, we look forward to continuing our business in the countries in which we operate for the benefit of all stakeholders."

Osler, Hoskin & Harcourt LLP is acting as legal counsel to the board of directors of Addax Petroleum. Canadian law firm Fasken Martineau LLP is advising Addax in the transaction. John Turner, who heads Fasken's global mining group, and Richard Steinberg, chair of the firm's securities and mergers-acquisition practice, are leading the 10-attorney team.

Related Articles

Lamoreaux joins ING's natural resources team

07/07/2014 The Houston-based Natural Resources Oil & Gas Group of ING Capital LLC, a corporate finance advisory and specialized lending services firm that is part of ING Group, has appointed Scott Lamorea...

Gazprom replaces head of export unit

07/05/2014

Gazprom has replaced Alexander Medvedev as head of its exporting arm, Gazprom Export, with one of his deputies, Elena Burmistrova, Reuters reports.

Harkand hires new group general counsel

07/05/2014

Harkand, an international subsea inspection, repair, maintenance (IRM) and light construction company, has appointed Jacqueline Hill as the group general counsel.

Buckeye’s general partner names new chairman and lead independent director

07/03/2014 Buckeye Partners LP reports that the board of directors of Buckeye GP LLC has appointed Clark C. Smith to succeed Forrest E. Wylie as chairman of the board, and has also appointed Frank S. Sowinski...

MEMP appoints Stillwell as vice president of finance

07/03/2014

Memorial Production Partners LP has appointed Robert L. Stillwell Jr. as vice president of finance of the general partner of MEMP.

More Oil & Gas Financial Articles

Lamoreaux joins ING's natural resources team

Mon, Jul 7, 2014

The Houston-based Natural Resources Oil & Gas Group of ING Capital LLC, a corporate finance advisory and specialized lending services firm that is part of ING Group, has appointed Scott Lamoreaux as director.

Gazprom replaces head of export unit

Sat, Jul 5, 2014

Gazprom has replaced Alexander Medvedev as head of its exporting arm, Gazprom Export, with one of his deputies, Elena Burmistrova, Reuters reports.

Harkand hires new group general counsel

Sat, Jul 5, 2014

Harkand, an international subsea inspection, repair, maintenance (IRM) and light construction company, has appointed Jacqueline Hill as the group general counsel.

Buckeye’s general partner names new chairman and lead independent director

Thu, Jul 3, 2014

Buckeye Partners LP reports that the board of directors of Buckeye GP LLC has appointed Clark C. Smith to succeed Forrest E. Wylie as chairman of the board, and has also appointed Frank S. Sowinski as lead independent director.

MEMP appoints Stillwell as vice president of finance

Thu, Jul 3, 2014

Memorial Production Partners LP has appointed Robert L. Stillwell Jr. as vice president of finance of the general partner of MEMP.

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ