Ending weeks of speculation, Italy’s energy major Eni said on Friday that along with Vår Energi it had reached an agreement to buy private equity-backed Neptune Energy for an enterprise value of $4.9 billion—the largest cash deal in the European oil and gas sector in years.
Under the terms of the agreement, Vår Energi – 63% held by Eni – will buy Neptune’s Norwegian business, which has an enterprise value of around $2.3 billion, while the Neptune Global Business will go to Eni for an enterprise value of around $2.6 billion.
Neptune Energy’s business in Germany is not part of the transactions and will continue to be owned and operated by the ultimate existing Neptune shareholders as a standalone group, Neptune said.
Neptune, an exploration and production company has mostly gas-oriented assets with low carbon intensity and operations in the UK North Sea, offshore Norway, North Africa, Indonesia, and Australia. Neptune is currently owned by China Investment Corporation, funds advised by Carlyle Group and CVC Capital Partners, and certain management owners.
Completion of the acquisitions is conditional upon the receipt of necessary regulatory and governmental clearances, among other things, and the transactions are expected to close by the end of the first quarter of 2024.
“The transaction represents an exceptional fit for Eni. It complements Eni’s key areas of geographic focus and supports its objective of increasing the share of natural gas production to 60%, and reaching net zero emissions (Scope 1+2) from the Upstream business by 2030,” the Italian group said in a statement.
Eni’s CEO Claudio Descalzi commented, “Neptune will contribute predominantly gas resources to Eni’s portfolio. Moreover, the geographic and operational overlap is striking, adding scale to Eni’s majority-owned Vår Energi; bringing more gas production and CCUS opportunities to the remaining North Sea footprint; building on Eni’s leading position in Algeria – a key supplier to European gas markets.”
The deal is expected to add around 4 billion cubic meters (Bcm) of gas supply for European consumers, Descalzi noted.
Source: Norvanreports