ADNOC plans to buy oil giant BP –

ADNOC plans to buy oil giant BP –

Abu Dhabi National Oil Company (ADNOC) recently considered buying BP, but negotiations were unsuccessful and ultimately the UAE state-owned company decided not to pursue a takeover of the British supermajor, people said. sources familiar with the discussions. Reuters.

ADNOC recently held preliminary discussions with BP and contacted investment banks for advice on a possible takeover, according to two Reuters sources.

The approach announced by ADNOC comes as the US oil and gas industry is undergoing major consolidation, with numerous multi-billion deals announced in the US in recent months.

The wave of mergers and acquisitions (M&A) has not yet reached Europe, although analysts say BP could be the target of a possible takeover by a rival.

BP shares suffered earlier this decade when the company announced its net zero emissions strategy. In early 2023, investors welcomed BP’s reversal on some targets and its commitment to investing more than expected in resilient oil and gas projects and pumping more hydrocarbons for longer to meet global needs.

BP said in February 2023 that it would produce more oil and gas for longer and increase its investments in oil and gas projects by up to $1 billion on average per year through 2030.

For the European majors, the objective “is to reduce or even close the structural valuation gap with their higher-rated American counterparts”, said analysts at Wood Mackenzie following the announcements of Exxon and Chevron concerning 100% equity mega-mergers.

In ADNOC’s pursuit of a takeover target, BP was one of the companies the UAE company looked at, one of Reuters’ sources said.

There were direct discussions between ADNOC and BP, but “they were unsuccessful”, the source told Reuters.

BP and ADNOC have worked in partnership on projects for more than five decades. The most recent collaboration was the creation of a natural gas joint venture in Egypt.

By Tsvetana Paraskova for

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