MADRID: Spanish oil group Cepsa announced Tuesday it had agreed on a deal worth 2.3 billion Canadian dollars or US$2.2 billion/1.6 billion euros to purchase Houston, Texas-based Coastal Energy, which owns assets in Thailand and Malaysia.
Cepsa, a Spain-based oil and gas group which is wholly owned by the Abu-Dhabi government's International Petroleum Investment Company, said it had reached a "definitive merger agreement" to acquire all outstanding shares in Coastal, thus extending its reach into Southeast Asia.
"Today's announcement reflects an important step in increasing Cepsa's exploration and production capabilities," said Cepsa chief executive Pedro Miro.
"Coastal's business comprises a high-quality portfolio of upstream assets located in Southeast Asia," he said in a joint statement with Coastal Energy.
Coastal chief executive Randy Bartley said the agreement provided "significant" value to shareholders and urged them to vote in favour of the deal.
Cepsa said it created a new subsidiary to make the purchase along with an investment partner, Strategic Resources Global controlled by "international value investor" Larry Low.
A spokesman for Strategic Resources, Jho Low, said: "With our strong relationships in Asia and Cepsa's strength in exploration and production, we believe we can grow Coastal's footbprint in Asia and further enhance the company's operations."
The Spain-based Cepsa offered 19 Canadian dollars for each share in Coastal, a 28 percent premium to the closing price on Monday in Toronto, where Coastal's stock is traded.
Cepsa said it also would assume 51 million Canadian dollars in net debt held by Coastal, bringing the overall value of the deal to about 2.3 billion Canadian dollars. (AFP)
