Italian energy group Eni SpA and Var Energi ASA agreed to buy oil and gas explorer Neptune Energy Group Ltd. for $4.9 billion to add assets from North Africa to the North Sea.
(Bloomberg) — Italian energy group Eni SpA and Var Energi ASA agreed to buy oil and gas explorer Neptune Energy Group Ltd. for $4.9 billion to add assets from North Africa to the North Sea.
The deal ends speculation over potential buyers for the private equity-backed company, which has attracted a number of suitors in recent years. The acquisition gives Var Energi the firm’s Norwegian operations, while Eni — Var Energi’s majority owner — gets assets elsewhere.
The transaction’s enterprise value is split $2.28 billion for the Norwegian assets and $2.6 billion for the rest, according to statements from the companies on Friday. The deal will add about 130,000 barrels of oil equivalent a day — most of it natural gas — to the Eni and Var Energi portfolios.
Eni has had Neptune on its radar since at least late 2022 in a bid to expand its gas business, and had been nearing a deal for the whole company for about $5 billion, Bloomberg News reported earlier this week. Neptune, which is backed by Carlyle Group Inc. and CVC Capital Partners, was formed in 2015 by former Centrica Plc boss Sam Laidlaw.
“This consideration is at the lower end of the range reported in the press,” Ashley Kelty, an analyst at Panmure Gordon & Co., said in a note. “While Neptune management will possibly be disappointed at the price, the PE backers should be pleased as this is a decent return.”
Eni slipped 0.5% at the open of trading in Milan. Var Energi jumped 4.1% in Oslo.
Dealmaking in the oil and gas sector is accelerating as governments prioritize security of supply and the biggest players and investors seek to deploy capital. Many of the acquisitions have targeted more environmentally friendly sources of energy, and Eni’s deal represents a rare upstream acquisition by a European major amid the broader industry shift to renewables.
Gas is key to Eni’s growth plans. Most of Neptune’s production comes from gas in the North Sea, North Africa and Asia — all regions where Eni operates. The fuel is expected to account for 60% of Eni’s hydrocarbon production by the end of the decade, and more than 90% in 2050.
“We see the transaction adding around 4 billion cubic meters of gas supply for European consumers,” Eni Chief Executive Officer Claudio Descalzi said in a statement.
Var Energi is about 63% owned by Eni.
–With assistance from Tommaso Ebhardt and Antonio Vanuzzo.
(Updates with analyst comment in fifth paragraph, shares in sixth.)
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